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Sentencing Comes After Alleged Longest-Running Ponzi Scheme in US History

Posted on Jul 28, 2011

On Friday June 17, 2011, Philip Barry was sentenced after being convicted last November of running a 30-year Ponzi scheme that took $45 million from hundreds of different investors. A New York jury had convicted Mr. Barry on one count of securities fraud and 33 counts of mail fraud.

The Ponzi scheme allegedly began in 1978 when Mr. Barry began accepting money from investors and "guaranteed" false annual profits ranging from 12.5 to 16 percent. Mr. Barry then reportedly used money from newer investors to pay some of his older investors. Some investors tried to withdraw money and their requests were allegedly ignored or their checks were returned for insufficient funds.

According to the prosecution, many of Mr. Barry's clients came from the working class, including nurses, teachers, and police officers. In total, the prosecution alleged that Mr. Barry lured 800 investors into investing about $45 million in purported stock options. Then, Mr. Barry allegedly invested in land, not stock options, and the land was not developed. The land was sold for $6.6 million in 2009 - far short of the alleged $45 million he took from investors.

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