5 hrs ago

http://www.wgrz.com/news/local/story.aspx?storyid=99444&catid=13

BUFFALO, N.Y. - An Amherst man is now the second person to plead guilty in a Ponzi scheme that defrauded unwitting investors of over $5 million.

Guy Gane, 56, admitted to both mail fraud and money laundering charges in U.S. District Court Thursday morning. He falsely told investors their money would be used to invest in waterfront real estate and in building dormitories in Maine. Instead, that money was used to pay back earlier investors, to pay salaries to himself and employees, to advance cash to his children, and for other business and personal expenses. A civil action by the Security and Exchange Commission is still pending.

Earlier this year, Lorenzo Altadonna pleaded guilty to similar charges involving the same scheme. Remaining defendants are set to go on trial in February.

"This case stands as a tragic example of how investors can be exploited and misled by someone they trust," said U.S. Attorney William Hochul. It bears repeating that here in Western New York, citizens work hard for their money. They need to know some are working just as hard to steal that money."

Gane faces a combined maximum penalty of 30 years in prison, a fine of $500,000 or both when sentenced in March.