50 years ago I lived in Watchung, New Jersey, a sleepy rural community 28 miles west of New York City. It’s hard to think of bad people living there, although I have not been back to visit in decades. Earlier this month, a U.S. District Court judge in Newark sentenced David Connolly of Watchung to 9 years in prison for securities fraud and money laundering. While he certainly deserved to go to jail, his lengthy sentence doesn’t get back the millions he stole from his victims.
Stories like that of David Connolly are repeated daily across the country. Fraudster scams dozens of hard working victims, fraudster gets caught and ultimately goes to prison. Why these con artists think they won’t get caught is probably nothing more than pure arrogance. Unfortunately, putting a fraudster in prison does nothing to make the victims whole. In many cases, Connolly’s victims lost their life savings.
How big was his scam? Prosecutors say David Connolly took in nearly $50 million from 200 investors by promising to invest in income producing properties. Much of the money, however, went into his pocket.
In addition to the 9 year prison sentence, Connolly must pay $18 million in restitution. By the time he is released from prison, he will be 60 years old. The job market isn’t especially bright for 60 year old convicted felons.
Having a great lawyer well versed in asset recovery work is key to recovering losses. While restitution orders look good on paper, they are almost impossible to enforce. Sometimes, however, it is possible to recover from 3rd parties.
In the case of David Connolly, prosecutors say that he and several associates formed several companies including Connolly Properties, Inc., Watchung Gardens Associates Trust, Fulton Towers Trust, Carteret Arms Trust, Connolly Realty, LLC, and others. We believe that some of the “investments” may have been sold through agents such as stockbrokers, investment advisers or real estate agents. If so, it may be possible to collect from these people and their insurance companies.
Although the fraudsters often have little money left when caught, recovery may be possible from the people who sold or marketed these investments.
If you invested with David Connolly or any of his entities through an agent, you may be able to recoup your losses. You may also qualify for special IRS fraud loss deductions.
If you lost $100,000 or more because of a stockbroker, investment adviser or other financial professional, give us a call. The stockbroker fraud lawyers at Mahany & Ertl have helped many investors get back their hard earned money. We also take cases involving other frauds including legal and accounting malpractice. Most cases can be handled on a contingent fee basis meaning no legal fees unless we recover money for you.
Interested in more information about special IRS treatment for fraud losses? We can help you there as well.
Mahany & Ertl – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota and San Francisco, California. Fraud recovery available in many jurisdictions.
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