Nassau Man Sentenced To Jail For Defrauding Investors

A Rockville Centre man was sentenced to more than two years and jail on Friday for his scheme that defrauded investors of nearly $450,000.

Patrick Morgan Schiro, the founder of Black Rock Morgan LLC (BRM), was sentenced to 28 months in jail and a to-be-determined restitution for a wire fraud scheme he orchestrated that defrauded five investors of $440,000. Schiro had pleaded guilty to the charges last year.

According to prosecutors, Schiro incorporated BRM, an investment management business, in February 2014. From approximately July 2014 to October 2015, Schiro used false and misleading statements to induce five
individuals to invest approximately $440,000 with BRM, and he concealed his prior federal conviction for securities fraud from at least four of them. For example, Schiro told one investor that BRM had many clients, managed millions of dollars in assets, and had “a team of investment professionals with significant sector-specific expertise.” Once he had money from the investors, Schiro also deceived them by telling them that their investments were performing well. He told one investor that his investment of approximately $242,000 was valued at $711,000.

Contrary to these representations, Schiro invested only a small amount of the money and used a significant amount of it for his personal expenses, including approximately $190,000 to pay one of his children’s college tuition. When investors asked for their money back, Schiro often ignored their requests or provided false or misleading excuses.

When one investor asked to redeem $250,000 from his account, Schiro sent an email to that investor stating that the request had been denied because: “Consistent with our AML [anti-money laundering] responsibilities and U.S. patriot act regulations wire transfer withdrawals and redemptions MUST and will ONLY be sent to the bank account associated with your BRM Account.” But no such policies existed.

Schiro pleaded guilty to wire fraud. The court has yet to determine how much money he will have to pay back.

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