Jeffrey Eldred Gallagher of Bradenton Beach, Florida was sentenced in Springfield, Massachusetts for an investment scheme that defrauded victims out of over $600,000 from 2008 to 2012. According to U.S. Attorney Carmen Ortiz, Gallagher was sentenced by U.S. District Court Judge Mark G. Mastroianni to three years in prison. Gallagher was convicted in December 2015 after he pleaded guilty to one count of wire fraud, three counts of engaging in a monetary transaction, and two counts of tax evasion.Ortiz stated that in 1989 Gallagher had been convicted of one count of mail fraud and three counts of interstate transportation of stolen property in connection with his illegal and unauthorized options trading while he was a stockbroker. As a result of that crime, Gallagher lost his stockbroker’s license and was sentenced to fifteen months in prison for defrauding clients and a former employer. In his more recent crime, Gallagher persuaded friends and associates to pay him money to invest on their behalf, making promises that their investments would yield returns of 10 to 15 percent, according to prosecutors. In classic Ponzi scheme fashion, Gallagher commingled investor funds with his own personal money, paying some investors with funds given to him by other investors. When investors asked Gallagher for the return of their investments, he provided various fake excuses about why he could not immediately repay them, including claiming that his mother had died. In reality, though, Gallagher’s mother is still alive, according to prosecutors. In a similar effort to stall for time Gallagher wrote investors more than 40 bad checks totaling almost $1.8 million. In sum, nearly two dozen investors lost a total of $617,475. Gallagher also used nearly $250,000 of investors’ money for personal benefit in 2009 and 2010, failing to report any of this income on his federal income tax returns for those years, prosecutors said. At the hearing, Judge Mastroianni called Gallagher’s crimes “very serious offenses” and said they involved a “betrayal of friendships and a breach of trust among friends.” If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.