Barred Broker Sentenced to Prison for $12M Ponzi Scheme
What You Need to Know
Matthew Eckstein was sentenced Monday to 3.5-10.5 years in prison.
The scheme by the ex-broker and an accomplice targeted almost 50 victims, many of whom were retirees.
The former broker pleaded guilty on Feb. 8, over 2 years after he first pleaded guilty but then withdrew his initial plea.
A barred broker was sentenced on Monday to 3.5-10.5 years in prison for his role in a $12 million Ponzi scheme that targeted almost 50 victims, many of whom were retirees, between 2015 and 2017, according to Nassau County District Attorney Anne T. Donnelly.
Matthew Eckstein, 52, of Syosset, New York, pleaded guilty on Feb. 8 before Judge Teresa Corrigan to charges of grand larceny in the first degree (a B felony) and conspiracy in the fourth degree (an E felony) in Nassau County Court, Donnelly said in a statement.
Eckstein previously pleaded guilty to the charges on Sept. 26, 2019, but later withdrew his plea. A new indictment was secured in August 2020 but court closures due to the COVID-19 pandemic further delayed the case, Donnelly noted.
Eckstein and an accomplice told investors they would invest their money but they instead used the money to fund other business enterprises, including hamburger restaurants, personal purchases and to pay other victims of the scheme, in Ponzi style.
Some of the stolen funds were used by Eckstein for the down payment on his home, which had a swimming pool and tennis court, according to Donnelly.
The Financial Industry Regulatory Authority, which barred Eckstein from the industry in 2018, according to his report on FINRA’s BrokerCheck website, as well as the Securities and Exchange Commission, Federal Bureau of Investigation, State Comptroller’s Office, U.S. Postal Inspection Service and New York State Attorney General’s Office all assisted in the case, the DA said.
Starting in January 2015, a victim for whom Eckstein worked as a financial advisor and personal accountant, agreed to invest about $385,000 into Conmac Funding Corp., a Hicksville, New York-based company owned by co-defendant Kevin Brody, at Eckstein’s urging, according to Donnelly.
At the time, Eckstein, assured his client that the investment was safe, had no risk, and the principal would be returned after a two-year waiting period with an additional 4% in interest, just like a certificate of deposit.
However, after waiting two years, the victim requested the return of the money in January 2017 but received a payment of only $26,699. At that time, Eckstein claimed that Conmac was an insurance company, and the victim’s money had to be paid back in installments.
