Associated Press
BUFFALO, N.Y. — A western New York man has been sentenced to six years in prison for advertising and selling businesses online that didn't exist.The U.S. Attorney's Office in Buffalo says James Rotterman also must pay back $4.5 million as part of a sentence handed down Friday.
Prosecutors say the suburban Buffalo man convinced hundreds of investors to send him millions of dollars by advertising on an internet site.
Investigators say he'd advertise non-existent merchant portfolio accounts which were to provide a cash flow to the investor, then supply victims with false profit and bank statements.
Prosecutors have said he used some of the money to pay off large gambling debts.
He pleaded guilty in May to wire fraud and other charges.
Rotterman managed to scam hundreds of investors out of $6,000,000 and admitted his crimes in federal court on Friday.
James Rotterman, 33, pleaded guilty to wire fraud and filing false income tax returns.
Through the internet, Rotterman was able to paint an elaborate picture for investors by claiming to have profitable merchant portfolio accounts.
By falsifying documents, Rotterman made investors believe they would see a return, but instead, they were scammed.
Any money they received simply came from other investors. Rotterman used some of the money he received to support a lavish lifestyle and pay off large gambling debts.
On top of scamming hundreds, Rotterman failed to report his profits to the IRS, failing to pay nearly $400,000.
Rotterman will be sentenced in August. For wire fraud, he could face a maximum sentence of 20 years in jail, a fine of $250,000, or both.
For filing false tax returns, Rotterman could be sentenced to three years in jail, a fine of $250,000, or both.
—Copyright 2012 Associated Press
Source: http://online.wsj.com/article/AP927487bf925243b6b27aaddcab4fa3ea.html
NY man sentenced to 6 years for investment fraud - WSJ.com
2 source: http://www.wivb.com/dpp/news/crime/orchard-park-man-rips-off-hundreds
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