Boston Man's $38M Ponzi Scheme Nets Ferraris, Porsches, Lambo

BOSTON — A Boston hedge fund manager was sentenced in federal court Thursday for running a Ponzi scheme that defrauded his family, friends and others out of some $38 million. Authorities said Raymond Montoya used the money for a host of personal expenses — including a fleet of luxury vehicles, college tuition for relatives and mortgage payments for one of his sons. Montoya, 70, of Allston, was sentenced to 14 ½ years in prison by U.S. Senior District Court Judge George O’Toole.

Montoya was also ordered to pay restitution and serve three years of supervised release. In October, Montoya pleaded guilty to three counts of wire fraud, five counts of mail fraud and two counts of conducting an unlawful monetary transaction.

Between 2009 and June 2017, Montoya ran a pooled investment hedge fund in Boston called RMA Strategic Opportunity Fund. Montoya falsely told his investors — including his family, friends, and acquaintances who lived in Massachusetts, Ohio, and California — that the fund was earning substantial returns. In fact, by 2014, RMA was sustaining substantial losses, prosecutors said.

The investors transferred millions of dollars of their personal savings and 401(k) retirement plans to Montoya and RMA. Montoya told the investors that he would invest their money in stocks and bonds, but he actually invested only a portion of their money, while diverting the rest — totaling millions of dollars — to business and personal bank accounts.

Montoya used investor money to purchase high-end vehicles, including a Lamborghini, Rolls Royce, three Ferraris and three Porsches), prosecutors said. He also paid for his children’s student loans and personal home mortgages.

"In addition to his fraudulent inducements, at times MONTOYA just stole money from the victims," prosecutors wrote. "In 2011, even before he started losing their money, MONTOYA used approximately $200,000 in investor money to pay for his children’s home loan and another $100,000 for a down payment on a 2010 Rolls Royce. By 2012 the RMA Fund was losing money and by 2015 the losses were substantial, but yet the stealing continued."

Several people gave victim impact statements, including one person who was taking care of his wife with Alzheimer's and had hoped to retire on the money he invested. Others said they would "never be the same."

"I am now 60 years old and we have been forced to completely rethink what will be our final chapter," read a statement from one of the victims. "There are no words to describe the devastation this time around. Mentally, physically and financially I/we will never be the same."

Others spoke of the embarrassment associated with the con.

"To say I’ve been depressed is an understatement, and I am unable to trust anyone," another victim wrote. "I am ashamed that I was tricked and that I put so much faith in a 'friend,' and that I am foolish to have fallen for this con man."

Montoya was previously charged with securities fraud in a civil complaint by the Massachusetts Securities Division. He was also prosecuted for embezzlement in LA and sentenced to five years of state prison in 1988.

If you believe you may have been a victim of Montoya, the FBI is asking you to fill this form out.

Below is a copy of court documents detailing Montoya's scheme: