Philip Barry, a 52-year old Brooklyn native, stole $40 million from 800 investors, many of whom were his neighbors or elderly, between 1978 and 2009, according to an SEC complaint filed in September. According to reports, Barry ran an organized fraud and kept a low profile, two reasons he was able to keep it going for so long: He lived in a $700/month apartment in Brooklyn near the homes of many of his clients, kept a sparsely decorated, shag carpet office with cheap furniture and had a well-known love of TV dinners. And while he has said that porn never made him any money, one of his side business ventures — Barry Publications — sold porn videos on eBay.
His primary “business” was run through Leverage Management, his Brooklyn-based business, and several other entities Barry controlled during this period. Barry conned investors into forking over millions with promises of high-returns and guaranteed safety of principal, among other misrepresentations.
Barry told investors he would invest their money in options or other securities. But according to the SEC, he did little buying or selling of securities. He primarily misappropriated investor funds for personal real estate ventures, which he then often used as collateral to take out loans. Barry hid the scheme for more than three decades with meticulous document fakery, including account statements that showed continuous performance as high as 21 percent in 1979 to 12.5 percent in 2008 on the fictitious assets.
Housing Boom Fraud:
The SEC filed a civil injunctive action in September against Robert D. Falor, alleging that he fraudulently offered and sold roughly $9 million of securities to 55 investors in the form of membership interests in an LLC that he controlled. Between July 2004 and April 2005, Falor sold securities in Printers Row Investors, LLC, South Beach Investors, LLC, and Tides Hotel Investors, LLS, for the advertised purpose of buying hotels, converting them to condos and selling them off. Instead, Falor paid himself and his wife, buying luxury cars, leasing private plans and financing his own pet real estate projects. Additionally, all the projects that Falor had undertaken on behalf of his investors were sold off and sale proceeds were pocketed by Falor, not the investors, according to the SEC. The complaint seeks the return of all investor funds with interest.