On December 30th, 2020, New York wholesale jeweler Gregory Altieri, 53, pled guilty to wire fraud and securities fraud in Brooklyn in front of New York U.S. District Judge Brian Cogan.

Altieri, who is from Melville, New York, is the president of LNA Associates Ltd. Altieri is accused of defrauding over 80 New York investors, the majority of whom were current and retired police officers and firefighters.

The Ponzi scheme took place in August 2017 and continued until 2020 when Altieri could no longer keep up with the outstanding debts he collected through his misleading investment offerings. He targeted individuals in cities around New York, including Queens and Staten Island, as well as Nassau and Suffolk counties.

The scheme revolved around wholesale jewelry in which Altieri touted that he was able to secure jewelry at wholesale prices which he would then resell at retail prices, yielding significant profits.

Altieri promised investors a guaranteed 30% return on their initial investment with a turnaround of just a couple of months. Altieri also told his investors that returns could exceed over 100%. His company, LNA Associates Ltd., was able to collect just under $70 million in investment capital. Initially, Altieri did purchase some jewelry but perpetuated the cycle of fraud by using the money of new investors to pay out the old ones. In the US Securities and Exchange Commission (SEC) complaint, officials explain, ‘’Instead of using investors’ monies to purchase jewelry, Altieri used the vast majority of the funds to perpetuate and conceal the fraudulent scheme, using monies from new investors to pay earlier investors their anticipated returns. Altieri also misappropriated investor funds to pay his personal expenses.”

Altieri was able to acquire additional funds to pay back investors their promised returns. He did this by getting a hold of millions of dollars from different merchant cash advance providers (MCA's). All the while, Altieri continued to mislead his investors about where their money was going and how their returns were being paid back.

According to the complaint, the Ponzi scheme was detailed to the point that Altieri had a “lot sheet” that described the different returns on different investments. He would often use this "lot sheet" to show prospective investors about the potential return he could provide. According to the SEC complaint, “One lot sheet identified 91 specific investment opportunities, ranging from between $11,000 and $2,041,000. The $11,000 investments offered returns of $15,000, representing a profit of 36 percent. A single $2,041,000 investment offered a return of $3,000,000, representing a profit of 47 percent.”

During the duration of his Ponzi scheme, Altieri also used funds to pay for his own personal expenses. During 2017 and 2019, the SEC complaint shows that at least 1$.4 million in cash were withdrawn from the LNA primary bank account. Another $1.9 million in the form of checks from investors were cashed at check cashing facilities.

Some of the funds were used to pay for extravagant family vacations as well as charges made on personal credit cards, home expenses, personal care expenses, tuition for his children, and car leases. The SEC complaint shows that Altieri used at least half a million dollars on personal expenses. An additional $1.3 million was taken out of the LNA fund and was used to purchase real estate for an individual who was associated with one of the MCA providers.

Altieri's inability to pay back his creditors eventually caught up to him in 2019 when he signed a confession of judgment showing that he had a debt of at least $70 million to one of the MCA providers.

According to the SEC, the charges against Altieri come with a potential 20-year prison sentence. After having pleaded guilty in December, Alteri's sentencing has been set for March 31st, 2021.