NEW YORK -(Dow Jones)- A money manager based in the Bay Ridge section of Brooklyn, N.Y., has been indicted in a Ponzi scheme that prosecutors say operated for three decades and involved more than $40 million.

Philip Barry, who ran a [...]]]> Who knew there was that much money floating around the neighborhood? Story shamefully linkjacked from here.

NEW YORK -(Dow Jones)- A money manager based in the Bay Ridge section of Brooklyn, N.Y., has been indicted in a Ponzi scheme that prosecutors say operated for three decades and involved more than $40 million.

Philip Barry, who ran a group of companies collectively known as Leverage Group, was charged Thursday in an indictment with securities fraud and 20 counts of mail fraud.

….Barry allegedly ran Leverage Group until February 2009 as a Ponzi scheme, paying returns to earlier investors from money received from other, newer investors, prosecutors said.

Prosecutors previously said that Barry approached them in August 2008, allegedly admitting that in the past he made payments to Leverage Group investors in part by using new investor money. The investigation has been ongoing since then.

The original SEC filing can be found here (sec.gov). It’s really gotta be one of the most stark first paragraphs in an SEC filing.

The Securities and Exchange Commission today charged a Brooklyn money manager for running a $40 million Ponzi scheme in which he promised approximately 800 investors guaranteed high returns from safe, liquid investments, but instead spent their money on real estate, his pornography mail order business, and other interests.

We hear at Bayridgistan are a blue-collar group. Much like the current Fox News-sponsored gold rush, the securities and derivatives hype of yesteryear reads as another Big Finance hustle–another way to get the workingman’s dollar to finance the back end of an investment fad. Just remember.. it’s always the last Ponze that’s the brokest.

Here’s some perspective on the “Madoff of Brooklyn” from dailyfinance.com. Here’s a particularly bizarre, and locally relevant section

Unlike Madoff’s investors, who were quick to clamor for their money, Barry’s customers seem more circumspect. Some, including New York State Conservative Party chairman Michael Long — who lost $15,000 with Barry — are convinced that Barry invested in good faith but was done in by the shaky financial and real-estate markets.
Of course, others haven’t been quite so forgiving. Barry’s various companies, including Philip Barry LLC, the Leverage Group, North American Financial, and Saint Joseph Development Corp., face a host of lawsuits. Apparently, Barry promised a minimum return of 12.55 percent to most of his customers but wouldn’t allow them to withdraw their funds. However, the biggest claim is that Barry, like Madoff, used money from new investors to pay off old ones. If that proves true, this classic “Ponzi” scheme will be the end of Barry.

In light of this, we here are relieved to see at least a little progress in the right direction.

The bill creates a new Consumer Financial Protection Agency (CFPA), imposes new curbs on the multitrillion-dollar derivatives market and sets up a new system for dissolving failing financial firms.

According to the Eagle “the biggest problem for the precinct seems to be noisy bars on Third Avenue between 88th and 90th streets, according to Rodriguez. Responding to public complaints [...]]]> The Brooklyn Eagle has this gem of an article about Bayridgistan (or the territory protected by the 68th precinct) being the safest area in South Brooklyn.

According to the Eagle “the biggest problem for the precinct seems to be noisy bars on Third Avenue between 88th and 90th streets, according to Rodriguez. Responding to public complaints and police attention, he said, Shenanigans soundproofed its premises and TRACE just completed its soundproofing work.”

Check out the full article here at the Bay Ridge Eagle.

Former Congressman Vito Fossella is scheduled to report to jail today for the first of two weekends behind bars.

Fossella pleaded guilty Monday to driving under the influence charges related to his arrest in Virginia last May.

He was sentenced to five days in prison, but is getting credit for one [...]]]> Here’s the breakdown from New York 1

Former Congressman Vito Fossella is scheduled to report to jail today for the first of two weekends behind bars.

Fossella pleaded guilty Monday to driving under the influence charges related to his arrest in Virginia last May.

He was sentenced to five days in prison, but is getting credit for one day spent in jail when he was originally arrested. He will serve the remaining time on two consecutive weekends.

Fossella’s arrest last May led to his admission of an extramarital affair with a woman with whom he had a child. He later decided not to run for re-election.

Here’s the piece from the New York Times.

The indictment charges that Mr. Rodriguez presided over a drug ring that sold up to 2,000 $20 bags of crack cocaine [...]]]> This bit of goodness brought to you by the New York Times, and the Bay Ridge Bloggers that helped attract attention to the spot in the first place.

Here’s the piece from the New York Times.

The indictment charges that Mr. Rodriguez presided over a drug ring that sold up to 2,000 $20 bags of crack cocaine each week across a broad swath of neighborhoods, most of them in southern Brooklyn: Bay Ridge, Sunset Park, Park Slope, Dyker Heights, Borough Park, Bensonhurst, Bushwick and Williamsburg. The drug ring also made sales in the Todt Hill section on the northern part of Staten Island. Mr. Rodriguez’s drug-selling activity goes back to 2003, officials said.

The drug ring’s dispatches received cellphone orders 24 hours a day, seven days a week, and sent drivers out to deliver the drugs to customers, according to the indictment.

Interestingly, Mr. Hynes said the current case “ stemmed from the investigation into a family of drug dealers operating out of two homes on 93rd Street in Bay Ridge, last June.”

In that earlier case, as Michael Wilson reported in The Times last fall, bloggers in Bay Ridge helped draw attention to suspicious activity at two houses, 346 and 348 93rd Street, between Third and Fourth Avenues.

Based in part on the bloggers’ posts, neighbors started filing complaints at the 68th Precinct station house and attending Community Board 10 meetings. The investigation resulted in the arrests of five people, including three brothers who lived in the two houses on 93rd Street.