Feds Charge Fair Lawn Woman with Luring Investors to $8 Million Ponzi Scheme

Jenifer Devine of Fair Lawn surrendered to FBI special agents in Newark on Tuesday morning for allegedly soliciting investments in a wholesale business that turned out to be an $8 million Ponzi scheme, U.S. Attorney Paul J. Fishman said.

The owner of a wholesale merchandise broker in Carlstadt, Devine, 39, had her initial appearance Tuesday afternoon before United States Magistrate Judge Patty Shwartz in Newark federal court. Shwartz released Devine on a $250,000 appearance bond, ordered her to undergo mental health and substance abuse testing and treatment, and barred her from working in the wholesale goods business moving forward.

According to a criminal complaint, Devine solicited investors from New Jersey and throughout the United States from December 2008 until September 2010 through her company, telling them that she would use their money to support Devine Wholesale, her wholesale clothing and electronics business—which in reality had virtually no business sales. More than 15 investors sent over $8 million to the company, and Devine has caused investor losses of at least $2 million, the U.S. Attorney's office said.

Devine promised to pay investors "huge" returns, usually of 25 percent, to secure short-term investments of between 30 and 60 days, the complaint said.

"This case reminds investors: always be wary of a sure thing," Fishman said in a statement.

Devine showed investors fake inventory lists of products she claimed to be reselling, according to the complaint. She used new investor funds to make principal and interest payments to existing investors and to fund her personal expenses, which included a Royal Caribbean cruise and purchases at luxury retailers such as Burberry, Gucci and Coach, the complaint said. Devine also transferred over $26,000 to her mother, who was not employed with the company.

"It is a difficult thing to convince people to be prudent and cautious with their financial investments when people like Ms. Devine make grandiose promises," Assistant Special Agent in Charge David Velazquez, of the FBI's Newark Office, said in a statement. "Criminals know how easily greed can override good judgment and they use that basic human flaw to victimize other people."

Devine is charged with one count of wire fraud and faces a maximum of 20 years in prison and a fine of up to $1 million if convicted.