Monmouth County Man Sentenced For $20 Million Ponzi Scheme

by Michelle Sahn

A Colts Neck man, who operated a $20 million Ponzi scheme, was sentenced Friday to some 6 1/2 years in federal prison, authorities said.

Louis J. Spina, 58, was sentenced Friday to 79 months by U.S. District Judge Anne E. Thompson in Trenton.

Thompson also ordered Spina to serve three years of supervised release, upon completion of his prison term, ordered him to forfeit $818,000 in seized assets and ordered him to pay $12.7 million in restitution to his victims.

Spina had pleaded guilty to wire fraud. In May 2014, while on pre-trial release, he robbed a bank in Coral Gables, Florida, according to a news release from Paul J. Fishman, the U.S. Attorney in Newark.

Spina pleaded guilty to the bank robbery in August 2014 and in October of that year, he was sentenced to 41 months in prison for that crime, the news release said. His New Jersey sentence will be served consecutively to that sentence.

Spina operated the Ponzi scheme out of his office in Fair Haven and his home in Miami, authorities said.

According to documents filed in the case and statements made in court:

Spina solicited victims to invest through his business, LJS Trading LLC.

Between August 2010 and November 2013, he collected $20 million from 42 investors and deposited the funds into the LJS bank account. Spina then provided those investors notes specifying a guaranteed monthly rate of return, typically ranging from nine to 14 percent.

But, Spina only transferred $9.5 million of the investor funds into a trading account. He used the other $10.5 million to pay the investors’ monthly interest payments, return portions of some investors’ principals, and to pay for his own personal expenses, including car purchases, rent on a luxury apartment, and a $400,000 donation to a private university.

Spina admitted he lied to investors about the status of their funds. He told them they were making large gains, but he actually lost all of the $9.5 million that he invested.

When some investors became suspicious, he reassured them by sending misleading screen shots of their account balances that reflected temporary gains, not the total daily losses.

He was also able to defraud his investors out of an another $1.7 million by fabricating a story about a wealthy individual who he said planned to buy LJS. He said that business transaction would result in a 14 to 30 percent return on their investment.

In total, Spina’s scheme cost investors a total of $12.7 million.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, New Jersey; and the U.S. Secret Service, under the direction of Special Agent in Charge Carl Agnelli in Newark, with their work on the investigation. Assistant U.S. Attorney Sarah M. Wolfe handled the case for the government.