Ponzi Scheme Lands Ex-West Chester Finance Advisor 5 Years In Jail

PHILADELPHIA, PA — A former investment advisor was sentenced Tuesday in U.S. District Court here to five years in federal prison for orchestrating a Ponzi scheme in which he defrauded his clients of more than $7 million.

Lee D. Weiss, 51, was also ordered by U.S. Eduardo C. Robreno to serve three years of probation following his prison term and pay $7.5 million in restitution.

Investigators said he used the money from some clients to pay other clients and to purchase cars and pay for country club membership.

Weiss was the principal of Family Endowment Partners, LP, an investment adviser registered with the U.S. Securities and Exchange Commission, which had an office in West Chester, which has since been closed by the SEC.

Jacqueline Maguire, special agent in charge of the FBI’s Philadelphia division, said justice demands that financial fraudsters like Weiss be held accountable for their crimes.

“Lee Weiss' clients expected him to invest their money responsibly and he had a fiduciary duty to do so,” Maguire said in a prepared statement. "Instead, he misappropriated millions for his and his company’s purposes.”

U.S Attorney Jacqueline Romero said honesty, integrity, and trust all play a critical role in the relationship between a financial advisor and a client.

“When the advisor corrupts that relationship, the damage done to the financial security of the client can be catastrophic,” Romero said. “The end result is as devastating and traumatic as if the victim had been robbed at gunpoint, and therefore we take it just as seriously. We will continue to hold accountable those who, like Mr. Weiss, commit life-shattering financial crimes."

According to federal court records:

• In March 2022, the defendant pleaded guilty to investment adviser fraud in connection with this scheme to defraud his clients.
• He fleeced his own clients of millions of dollars through purported investments in a now-defunct Florida tobacco company and a series of private securities offerings.
• Weiss told his clients that their money would be used for investment purposes when he diverted it to make Ponzi payments and to fund his lifestyle.
• Weiss continued to lie to them about the value of their investments to prevent them from learning of his thefts and to convince them to continue paying him fees for “managing” their money.