United States v. Lewis

HARTZ, Circuit Judge.

I. INTRODUCTION

Norman Schmidt and Charles Lewis conducted a Ponzi scheme through a num ber of ostensible investment companies (the “scheme companies”). Prospective investors were told that they would be participating in an exclusive program that purchased high-yield notes whose principal was guaranteed by reputable insurers. But their money was never used to purchase such notes. Rather, funds from new clients were used to pay the operators of the scheme and to pay off earlier investors. The scheme, which lasted from April 1999 until late 2004, resulted in estimated losses…