Man pleads guilty in $2 million Ponzi scheme
SAN DIEGO — A San Diego man admitted in federal court Thursday to defrauding investors out of nearly $2 million by posing as an investment adviser while actually running a Ponzi scheme.
Paul Moore IV, 51, pleaded guilty to a securities fraud charge that carries maximum penalties of 20 years in prison, a $5 million fine and restitution orders. He is scheduled to be sentenced Oct. 5.
Moore committed his crimes by posing as a finance expert, claiming to run a hedge fund that turned tremendous profits for his clients, prosecutors said.
In reality, he had no relevant education or experience and was actually stealing most of his customers’ money, according to the U.S. Attorney’s Office in San Diego.
As outlined in his plea agreement in the criminal case, Moore established Coast Capital Management LLC in 2009 and began soliciting investors among his friends and acquaintances.
Moore told the victims he had earned an undergraduate degree in economics from a respected state university, had worked as a senior analyst at a large national securities firm, had registered himself and his firm with securities regulators and was creating significant returns for his clients through his knowledge and expertise in securities trading.
In truth, Moore quit college without earning any credits toward a degree, had never worked for the firm he touted, did not register himself or his fund with regulators and lost money when he did trade small portions of the investor funds entrusted to him, court documents state.
Of the $2.8 million he “managed” for investors, Moore used $1.7 million of it for personal travel, shopping sprees, meals, entertainment, and other expenses, federal authorities said.
To keep the scheme going and to conceal his theft, Moore complied with certain investors’ redemption requests by paying them with funds deposited by other investors, usually more recent ones.
When it came time to tell investors about his performance in the stock market, Moore created and distributed false account statements showing large volumes of highly profitable trades that he supposedly made on behalf of investors. In truth, the trades never happened.