Katonah Accountant Headed for Federal Prison

An accountant from Katonah has been sentenced in federal court for securities fraud, wire fraud and money laundering for a $2 million investment scam.

Judge Cedarbaum of the United States District Court for the Southern District of New York sentenced Brown, 64, to a five-year federal prison term, according to Preet Bharara, U.S. Attorney for the state's southern district. In addition to his prison term, Brown was ordered to pay a $400 special assessment fee.

Brown was a principal and general partner at an accounting firm in Armonk. Bharara said that from 2008 to June 2010, Brown and his business partner convinced at least 10 people, including clients of the accounting firm, to invest more than $2 million in a company that held a gas pipeline in Tennessee.

Bharara said Brown made false claims to investors that he was president of the gas pipeline company and that their money would be used to upgrade the pipeline. Bharara said Brown took most of investor funds for his personal use, as well as that of his family and others. Another $136,550 of investor money was used to make payments to other investors, Bharara said.

Brown to the charges in September of this year.

Bharara praised the work of the Criminal Investigators of the United States
Attorney's Office, and thanked the U.S. Securities and Exchange Commission for its assistance in the case, brought in coordination with a White House financial fraud enforcement task force.