It was a simple scam that most recently landed John Mattera in jail. He was selling shares in companies -- including Facebook and Groupon -- that didn't actually exist. For this, Mattera pled guilty today to three criminal counts -- conspiracy, securities fraud, and wire fraud, according to Bloomberg.
In selling these shares that he didn't own and wasn't allowed to sell, Mattera raked in $11 million from naive would-be investors.
Mattera carried out these scams through a hedge fund he operated called Praetorian Global Fund, according to Bloomberg. For the two years he managed this fund, he'd sell phony shares for companies that weren't yet public but were expected to make initial public offerings in the near future. Instead of investing his customers' money, he bought luxury items for himself, including jewelry, cars, and interior decorating for his plush Florida home.
The Feds originally nabbed Mattera in South Florida in November 2011 and scheduled his hearing for this week in U.S. District Court in New York City. Once in court today, Mattera pled guilty to all three criminal counts and tried to plead guilty to a fourth count of money laundering. According to Bloomberg, Judge Richard Sullivan refused to let Mattera remain free on bail after the hearing and instead ordered him to go immediately to jail.
Mattera has a long history with fraud. According to Forbes, his criminal resume includes bogus bankruptcy filings, moonlighting as a mortgage broker without a license, and Securities and Exchange Commission stock fraud.
Mattera is scheduled to be sentenced for his most recent con in February and it's expected he will get 10 to 12 years in prison. Judge Sullivan said he would decide later whether he'd accept Mattera's guilty plea to money laundering.