LOS ANGELES
An accountant was sentenced Tuesday to four years and three months in federal prison for running a four-year, $3.3 million Ponzi scheme, according to officials.
The scam conned dozens of investors through false promises of generous returns on foreign exchange currency investments and was funded, in part, by his embezzlement from his non-profit employer.
U.S. District Judge Philip S. Gutierrez sentenced Steven F. Brown, 53, of Marina del Rey, was sentenced by
The judge also ordered Brown to pay $3.3 million in restitution. Brown plead guilty in October 2020 to one count of wire fraud.
In total, Brown caused losses of approximately $3.3 to 48 victims, including nearly $700,000 in losses to his former employer based on the money he embezzled from it.
Brown controlled and operated Alpha Trade Analytics, Inc., a financial consulting-and-investment company he largely ran out of his home.
Neither Brown nor Alpha Trade was a registered broker or dealer in securities.
Brown also served as the accountant for a non-profit organization providing dance and theater arts education to children and young adults in Los Angeles, which gave him access to its bank accounts.
From April 2014 to May 2018, Brown solicited investments in Alpha Trade, including from people he encountered through his position at the non-profit, and through his relationship with its executives and employees, which afforded him access to high-net-worth individuals.
To encourage those individuals to invest with Alpha Trade, Brown falsely promised that their investments would only be used for foreign exchange (Forex) currency trading and that they would receive guaranteed monthly payouts of around 10%.
He also falsely represented that he had extensive experience in Forex investing, regularly made profitable trades, and achieved substantial and growing rates of return that exceeded the industry average.
Contrary to his representations to investors, Brown only used a small portion of the total amount invested in Alpha Trade for Forex trading, mostly in 2015.
Instead, he routinely used investor funds for other purposes, including his rent, car payments, restaurant and retail expenses, and lulling payments to other investors.
To induce investors to maintain or supplement their investments with Alpha Trade and to conceal his scheme, Brown periodically provided investors with account statements that reflected fabricated investment returns that often showed steady, significant gains.
Brown made some of the promised recurring payouts and provided demanded refunds, not based on any Forex investment returns, officials stated.
Instead, from money stolen from new investors and through funds, he embezzled from the dance academy through unauthorized wire transfers, credit card advances and cash withdrawals he was able to make by virtue of his position as the dance academy’s accountant.