Former Rock Hill investment broker Gene Sullivan pleaded guilty in federal court Monday to one count of mail fraud - admitting to defrauding at least 35 people out of more than $2 million in a Ponzi scheme dating back to 1995.
Sullivan, a New York Life insurance agent for more than 30 years, will be sentenced April 7. He faces up to 20 years in prison.
Sullivan and his attorney declined to comment after the hearing before U.S. District Court Judge Matthew J. Perry Jr.
During the hearing, Sullivan admitted to all of the allegations against him in the case that ranged from 1995 to 2008.
Prosecutors said Sullivan used $900,000 to $1.2 million of investors money for his own use, paying for cars, a home and his children's education.
Sullivan was fired after the insurance company learned of the alleged scheme involving some investors he knew for decades, pleaded not guilty in September after he was indicted in August.
Sullivan was released in September on $100,000 unsecured bond.
Federal authorities accused Sullivan in seven counts of mail fraud of taking money from about 35 investors from 1995 through November. Sullivan entered into agreements with people, then promised money would be paid to the investors as interest, according to the indictments.
Prosecutors claimed in the indictments that Sullivan had deposited more than $2.5 million into his personal bank account.
New York Life paid back more than $2 million to investors, then filed a lawsuit against Sullivan earlier this year in an attempt to get the money back.
A Ponzi scheme generally involves a central person starting an alleged fraud. That person collects money from new investors and uses it to pay purported returns to earlier investors rather than investing or managing the money as promised.
In August, the Financial Industry Regulatory Authority, an organization that oversees the country's brokers, banned Sullivan from working as a broker. In a settlement agreement signed by both FINRA and Sullivan, FINRA alleged Sullivan raked in more than $3.7 million starting in 1988, then brought in more investors to pay off mounting personal debts.