After $500K swindle of Sumter man, a guilty plea and prison time

The (Sumter) ItemSeptember 13, 2013 

ISTOCK.COM

— A Florida man who pleaded guilty in May to swindling a Sumter industrial construction company’s chief executive officer out of $500,000 has been sentenced to more than five years in federal prison.

Paul D. Pomfret, 49, formerly of Palm Beach, Fla., was sentenced to 63 months in federal prison and ordered to pay $1,631,090 to various victims, including a Sumter man identified solely by his initials in court documents.

U.S. Attorney Bill Nettles announced in a release on Friday that Pomfret met the CEO during a 2010 trip to the Cayman Islands, where the defendant pitched his PDP Capital Investments in Palm Beach as a hedge “fund of funds.”

A hedge fund of funds begins with a single investment from an individual into a single hedge fund; that money then buys into multiple funds overseen by different managers. Pomfret told the Sumter businessman and others that his fund invested in about 20 such hedge funds throughout the world.

According to an indictment filed by the federal authorities in November 2012, Pomfret twice sent account statements to the Sumter man indicating positive returns on his investment, but statements in early 2011 indicated a loss for late 2010.

“Further correspondence indicated (the victim’s) investment was being written down and claimed (the offshore funds) were being closed,” the indictment reads. “(The victim) demanded a refund of the balance.”

Nettles said Pomfret never invested the man’s money, but rather used it to pay off two previous investors in an arrangement known as a Ponzi scheme. Named after famous con artist Carlo “Charles” Ponzi — who promised his victims a 50 percent profit on their investments within 45 days and 100 percent in 90 days — such a scheme uses newly invested funds to pay off previous “investors.”

Pomfret was charged with wire fraud, his indictment says, because he “did cause to be transmitted in interstate commerce by means of a wire communication from (the victim’s) bank account ... in South Carolina to (an account) in Florida under (Pomfret’s control).”

Pomfret initially faced up to 20 years in prison for the offense, according to his plea agreement. Nettles said in a release that other victims are accounted for in the full restitution amount. “(The entire restitution) resulted from other individuals who fell victim to similar promises (made by Pomfret),” he said.

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