(Bloomberg News) Carr Miller Capital LLC, a New Jersey investment firm, was accused in a lawsuit by state Attorney General Paula Dow of using a Ponzi scheme to defraud investors of more than $40 million.
The firm and its principals used $13.5 million in investor money for cars, luxury vacations and a skybox to watch the New Jersey Devils hockey team at the Prudential Center in Newark, Dow said today in an e-mailed statement. They also put $16 million into hedge funds, real estate, film production companies and an oil and natural gas venture without telling investors, she said.
The state on Monday barred Marlton-based Carr Miller from the securities industry, along with three principals: Everett Charles Ford Miller, 41; Brian Patrick Carr, 39; and his cousin, Ryan Jude Carr, 34. A state judge froze assets held by Miller and his companies, and appointed a receiver.
"These defendants operated a Ponzi scheme for their own enrichment at the expense of investors," Dow said. "Instead of investing funds to produce high rates of return as promised, we allege that the defendants spent investors' hard-earned money on personal luxuries and indulgences."
Dow's office and the state Bureau of Securities filed the civil complaint in Superior Court in Newark. Jeff Lamm, a Dow spokesman, declined to comment on whether the company or its principals are under criminal investigation.
"Everett Miller and Carr Miller Capital look forward to having the attorney general's complaint adjudicated in a court of law, unlike the Office of Attorney General's apparent preference to have the case adjudicated in the press," said their attorney, Tom Chiacchio.
"Ryan Carr was a commissioned sales person but not a principal of Carr Miller," said his attorney, Rocco Cipparone. "If any fraud or Ponzi scheme existed, and I'm not suggesting there was such a scheme, Ryan Carr was not a knowing participant. To his knowledge, investor funds were properly placed. He lived a modest lifestyle and didn't misappropriate funds."
Calls for comments weren't immediately returned by Mark Astarita, a lawyer for Brian Carr.
Carr Miller offered nine-month notes that purportedly gave annual returns of 10% to 15%, according to Dow's statement.
"The promised rates of return sounded too good to be true and, sadly, that turned out to be the case," Thomas R. Calcagni, acting director of the state consumer affairs division, said in a statement.
The case is Dow v. Miller, ESX-C-288-10, Superior Court of New Jersey, Essex County (Newark).