April 29 (Bloomberg) -- A New York money manager pleaded guilty to running a $96 million Ponzi scheme that was used to buy luxury homes and cars and to finance an unprofitable 117-unit resort in eastern Long Island, prosecutors said.
Brian Callahan, 44, pleaded guilty to securities and wire fraud and faces as long as 40 years in prison, according to a statement today from the U.S. attorney’s office in Brooklyn.
“Callahan used six offshore entities to perpetrate one of the largest investment frauds in Long Island history,” U.S. Attorney Loretta Lynch in Brooklyn, New York, said in the statement. “Through lies and deceit, he misled investors and stole investor funds, including investments from a local fire department, to support a lavish lifestyle.”
Callahan, of Old Westbury, New York, raised more than $118 million from at least 40 investors, who were told their money would be placed in mutual funds, hedge funds and securities, according to the statement. Instead, he used most of the money to support his lifestyle and fund a beachfront resort he owned with his brother-in-law in Montauk, New York, according to the statement.
Robert Knuts, a lawyer for Callahan, didn’t immediately return a call to his office for comment on the guilty plea.
The case is U.S. v. Callahan, 13-00453, U.S. District Court, Eastern District of New York (Central Islip.)
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