A Pennsylvania woman was arrested earlier this month on charges that she orchestrated a massive Ponzi scheme that some attorneys say may have cost her former clients millions in lost savings.
Patricia S. Miller, 67, who allegedly carried out the scheme as an advisor affiliated with a broker-dealer in Massachusetts, was charged with wire fraud and arrested in Pennsylvania on June 6, according to U.S. Attorney Carmen M. Ortiz in Massachusetts.
At one point in the investigation, FBI agents found Miller in her McMurray, Pa., office slumped over her desk and unconscious, in what some news reports described as an apparent suicide attempt.
The U.S. Attorney’s office released few details about the case, but the victim's lawyers—and a number of lawyers seeking to represent victims in the case—say the Ponzi scheme was far reaching and involved numerous victims.
Chad Kohler, an attorney representing some of Miller’s former clients, says the alleged scheme dates back probably to the mid-1990s and involved many clients.
“The amount of money can only be guessed at but will be in the millions of dollars,” Kohler says.
Miller used her position as a financial advisor, as well as her association with Investors Capital Corporation, a broker-dealer in Lynnfield, Mass., to obtain money from clients for purported investments that she never made on their behalf, according to the U.S. Attorney’s complaint. Investors Capital fired Miller in May after receiving a complaint alleging that an investor provided Miller with $80,000 and the funds were misappropriated.
Miller promised high returns if clients put their money into investment clubs called, among other things, KS Investments and Buckharbor. Miller told clients the funds would be placed in fixed-income notes and other investments. Instead of investing the money as promised, Miller misappropriated client funds for her own personal use, Ortiz says.
If convicted, Miller faces a maximum sentence of 20 years in prison, three years of supervised release and a $250,000 fine.
Andrew Stoltman, a lawyer in Chicago who has interviewed alleged victims, says he knows of 20 former clients of Miller who lost more than $5 million. He says it may be only “the tip of the iceberg.”