Hingham Man Charged with Running Ponzi Scheme

HINGHAM, MA — A Hingham man faces charges after defrauding his neighbors and acquaintances in a Ponzi scheme, authorities said.

Stephen S. Eubanks, 47, was arrested Tuesday and charged with wire fraud, according to the U.S. Attorney's office.

Investigators say Eubanks starting running a hedge fund under the name Eubiquity Capital LLC, taking in approximately $529,000 in investor funds. He previously worked as a registered broker with several large brokerage firms, but was fired following customer complaints and other disciplinary issues. According to the complaint, in 2013 and 2014, Eubanks told two acquaintances that he was a registered financial adviser running a hedge fund affiliated with Goldman Sachs, TD Ameritrade, UBS Bank and Fidelity Investments.

One client invested a total of $125,000 with Eubanks, while the other invested $20,000. A third person, living in Florida, invested $50,000 with Eubanks in 2013, the U..S Attorney's office said.

Eubanks allegedly invested some of his clients’ funds, but used a significant portion for personal expenses. When investors asked for account statements summarizing their funds’ performance, Eubanks fabricated account statements, or used account statements from unrelated accounts to deceive his clients into believing that their money had earned a healthy return. In some instances, Eubanks allegedly ran the fund as a Ponzi scheme, using money deposited with him by newer investors to pay “returns” due to earlier investors.

Eubanks faces up to 20 years in prison; three years probation; and a fine of $250,000 or twice the gross gain or loss, whichever is greater.

Information in this article was provided by the U.S. Attorney's office. Arrests and charges mentioned don't imply conviction.

Image via Shutterstock