A former financial advisor was sentenced to more than six years in prison on Friday for ripping off elderly investors in a $2 million Ponzi scheme that he used to pay his child's tuition, according to the U.S. Attorney’s Office in New Jersey.
Daniel Rivera, a 51-year-old former advisor from Hillsborough, N.J., solicited funds from aging investors for a company called Robbins Lane Properties Inc., which he told them invested in real estate ventures. Despite his claims that the company had real estate professionals on staff, it had no employees or real estate on its books, said the Department of Justice. Instead, Rivera used new investor money to pay back other investors. The department put the size of the scheme at $2 million.
The department also said that Rivera filed a false tax return and underreported his taxable income by $33,276.
Rivera solicited the funds from elderly investors from 2008 to 2017, the department said. The Securities and Exchange Commission filed a complaint against Rivera and Robbins Lane in 2016, claiming that the advisor targeted 30 investors, who were largely elderly and unsophisticated. The agency said that one of his brochures made false statements that Robbins Lane meant to seek out undervalued “properties for redevelopment or immediate resale at profit yields markedly above market average.” As part of the scheme, he asked investors to move their retirement money to a self-directed IRA account held at a third-party custodian.
“Rivera … promised investors that they would receive a guaranteed monthly income, and that the company’s rate of return was based on secure real estate investments in the company’s portfolio,” said the DOJ in its announcement. “In reality, Robbins Lane had no employees, no real estate portfolio, and the monies used to pay investors as a purported return on their investments was from funds he received from other investors. Rivera also used funds sourced from investors to pay his personal and unrelated business expenses, including paying his child’s college tuition and sorority fees.”
Rivera had previously pleaded guilty in 2019 to a charge of wire fraud and one count of subscribing to a false tax return. U.S. Judge Anne E. Thompson of the District of New Jersey ordered Rivera to pay back $1.47 million to his victims and pay $284,863 to the Internal Revenue Service. In addition to the 78 months of prison time, Thompson also sentenced Rivera to three years of supervised release.