Newport man gets 15 months for fraud

A former stock broker from Newport Beach was sentenced Tuesday to 15 months in prison for his part in an investment scheme designed to defraud an investor of $1 billion, the U.S. Department of Justice announced.

In 2006, William J. Ferry, 71, and his co-conspirators promoted a fake plan they claimed was regulated by the Federal Reserve Bank with the purpose of raising money for humanitarian purposes like relief funding after Hurricane Katrina.

Profits from the invested money would supposedly be split into three equal parts: funding for disaster relief or another humanitarian purpose, financing for the project and returns for the investor.

The scheme "promised an extremely high return at little or no risk to principal," the DOJ said ina news release.

The conspirators' target, however, was an undercover FBI agent working on a team that poses as wealthy investors to catch such schemes before they make it to the public.

Ferry, a former investment advisor, posed as the scam's underwriter, according to the DOJ, and Dennis J. Clinton, 65, a former investment manager from San Diego, posed as a trouble shooter for the deal.

Paul R. Martin, 64, a former vice president and managing director at Bankers Trust from New Jersey, posed as a banking expert.

Both Clinton and Martin received 30-month prison sentences.

All three were convicted in July 2012 of conspiracy, mail fraud and wire fraud.

Two other conspirators have already been to 120 and 24 months, respectively, in prison, and the FBI is continuing to investigate the case, the DOJ said

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