Gregory Vincent Cronin, 49, of Lovettsville, Va., pleaded guilty today to operating a scheme that defrauded more than $6.7 million from his clients who gave him their money to invest in blue chip stocks.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Daniel S. Cortez, Inspector-in-Charge of the Washington Division of the United States Postal Inspection Service, made the announcement after the plea was accepted by United States District Judge Liam O’Grady. Cronin pled guilty to one count of mail fraud and one count of securities fraud. Cronin faces a maximum penalty of 20 years in prison on the mail fraud count and 25 years in prison on the securities fraud count when he is sentenced on July 23, 2010.
According to the statement of facts filed with his plea agreement, Cronin operated a business, Innovative Investment Advisors, Inc. From 2002 through 2009, friends, relatives, and former clients who had invested with Cronin when he had worked for a large bank gave him money to invest for them. Cronin encouraged some to refinance their homes to obtain money to invest. Cronin sent them statements falsely showing that he had invested their money in blue chip stocks and that their investments were doing well. In fact, however, he never set up separate accounts for the individual clients, but instead deposited the money into one account and used it to buy and sell stock index options. Over the years, Cronin lost large sums of money through his options trading. If a client persisted in wanting some money returned, Cronin would use a later investor’s money to repay that person. When Cronin ceased his scheme in September 2009, more than 50 victims had lost approximately $6.7 million.
This case was investigated by the Postal Inspection Service’s Northern Virginia Field Office and is being prosecuted by Assistant United States Attorney Jack Hanly.