Newport man pleads guilty in Ponzi scheme; faces up to 50 years in prison
A Newport Beach man pleaded guilty to charges in connection with a multimillion-dollar Ponzi scheme and faces up to 50 years in prison when he is sentenced Nov. 16.
As part of a plea deal last week, Brandon Walton Stewart, 33, is expected to pay a $26,594,810 fine.
Stewart pleaded guilty to one count of burglary, 22 counts of using untrue statements in the purchase or sale of a security, 125 counts of money laundering, 38 counts of check fraud and multiple counts of tax fraud, according to court documents.
He was arrested in May 2015 in Dallas before being extradited to Orange County, where he faced charges that he ran a $13.5-million Ponzi scheme from April 2009 through January 2013.
A Ponzi scheme is when investors are offered high short-term returns on investments, but instead of the investments generating income or legitimate profits, the investors’ money is kept for the benefit of one person or is used to repay earlier investors.
Stewart was accused of misleading four victims, including a 92-year-old relative, into investing a total of $10.6 million by saying their funds would be added to a $100-million investment pool.
Instead, authorities said, Stewart used the funds for personal expenses such as flights to Las Vegas on a private jet and betting thousands of dollars in casinos.
He also was accused of defrauding banks by writing nearly $3 million in bad checks between November 2012 and July 2014, and of not filing state tax returns from 2010 to 2013.
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