Manhasset Resident Arrested For $19 Million Ponzi Scheme

Paul Rinfret

The Southern District of New York (SDNY) and Securties and Exchange Commission (SEC) have brought forward charges against Paul Andrews Rinfret, 70, of Manhasset. Rinfret allegedly embezzled more than $19 million from investors by selling them limited partnership interests in his investment fund, Plandome Partners LLC.

According to the court documents filed by the SEC, Rinfret boasted to investors that the trading strategy had generated triple-digit returns as high as 362 percent for Plandome Partners investors over a multiyear period, and that Plandome Partners had never lost money in a single month since 2012. Rinfret told investors that Plandome Partners has been using a proprietary algorithm to day-trade S&P 500 futures contracts, state the documents.

Rinfret, allegedly, only invested a small portion of the money that investors gave him. The SEC says the money that was invested never made a profit and Rinfret’s trading lost money month after month.

According to the SEC complaint, the rest of the money that was not invested was used by Rinfret to pay personal expenses, purchasing high-end luxury goods, vacation rentals and to pay back earlier investors of Plandome Partners.

From the Plandome Partners account, the SEC says Rinfret paid for: at least $30,000 for a lavish engagement party for his son at a Manhattan restaurant complete with a custom photo wall with the hashtag #RinfretAllDay; approximately $50,000 for a South Hampton vacation home rental; $35,000 for custom kitchen cabinets; $170,000 on jewelry, watches and cars; more than $105,000 on wine and other alcohol; approximately $12,000 on cigars; more than $130,000 at restaurants; Rinfret withdrew almost $570,000 in cash from the Plandome Partners account, including more than $500,000 in ATM withdrawals; and he paid for everyday expenses such as dry cleaning, gas, car wash, gym membership, DMV and AAA fees, student loan payments, eye glasses, tanning and shoe store purchases.

“As alleged, Paul Rinfret deceived investors at every step,” said Manhattan U.S. Attorney Geoffrey S. Berman in a statement. “He lied about his past returns to get them to invest. He lied about having invested all of their money, when he was actually spending much of it on things like jewelry, cars, and a Hamptons vacation home. He lied about how their money was growing. His alleged lies stop today. We will work tirelessly with our law enforcement partners to stop this kind of alleged Ponzi scheme in its tracks and bring defendants like Rinfret to justice.”

Rinfret had been previously sanctioned by the New York Stock Exchange, so he was unable to open an account at a brokerage firm using his own name. According to the court filings, Rinfret used two of his family members names to open an account at “Brokerage Firm 3” and his own name did not appear on any of the documents.

One of the family members that signed documents passed away in or about June 2014, but “Brokerage Firm 3” account statements continued to go to that individual’s address through 2016. SEC court filings state that Rinfret frequently called “Brokerage Firm 3” on his cell phone after that person’s death and pretended to be the deceased person.

According to documents, in dealings with two other brokerage firms, Rinfret used the names of two of his three adult children. In multiple calls with both brokerage firms, he pretended to be his son, John Paul Rinfret, and told the firms that he was only trading his own family’s personal fund, the SEC reports.

The SEC court documents also state that Rinfret transferred at least $845,000 to two companies controlled by his wife, Denise, a least $325,000 to John Paul and at least $675,000 to his son-in-law.

The SDNY court documents also assert that a total of $2.4 million dollars was transferred to John Paul, daughter Amanda, a business owned by Denise, and another daughter Missy and other of Rinfret’s relatives and their businesses.

Denise Rinfret and Missy Rinfret Minicucci, owners of The Rinfret Group, an interior design company in Roslyn. Money was transferred from Plandome Partners to The Rinfret Group, but The Rinfret Group’s attorney denies that his client knew the funds were gained illegally. (Photo provided by attorney Roger J. Bernstein)

The Rinfret Group, an interior design company based in Roslyn, is owned by Denise and Missy.

“The owners of the Rinfret Group had no knowledge of how Paul Rinfret ran his business and believed that the money he transferred to The Rinfret Group was legitimately earned,” said Roger J. Bernstein, an attorney representing The Rinfret Group and John Paul. “They are shocked and saddened by what transpired.”

According to the SDNY court documents, Rinfret was trying to raise money from four of his wife’s business clients, but said, “if I’m going to jail, why drag 4 new ppl into this.”
After allegedly confessing to one of his victims, who was also a family friend, Rinfret told them that John Paul did not know about Rinfret’s conduct. John Paul was given false account information from his father to give to Plandome Partners’ clients in monthly statements, according to the SDNY.

Bernstein says that John Paul was “innocently involved” and that the son would give truthful testimony if asked.

Rinfret allegedly told that same victim that Denise did not know about the scheme either and not to tell her what happened. Rinfret told the victim to tell his accountant that the “money was stolen.”

Rinfret’s attorney, Jennifer Willis, could not be reached for comment.

“As alleged, Paul Rinfret willfully and continually defrauded his investors, the very people he was tasked with serving, in a multimillion-dollar Ponzi scheme that served to enrich only him,” said Special Agent-in-Charge Angel M. Melendez. “The special agents of our El Dorado Task Force will continue to expose such fraud at the national and international levels and assure that such financial predators are brought to justice.”



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