Allston man charged as Ponzi-scheme goniff who tried to assure investors he was no Bernie Madoff

Raymond Montoya, 69, was arraigned in federal court yesterday on charges he defrauded family members and friends out of millions of dollars in a bogus investment scheme over the last eight years.

Montoya's arrest on charges of mail fraud and wire fraud come two months after state securities regulators filed their own claim against him for the way he allegedly sucked millions of dollars out of investment funds he ran out of a ninth-floor office at 175 Federal St. downtown.

State regulators charge that of the $30 million investors trusted him with between 2014 and this year, only $16 million actually went into investments, with the rest going into a "personal slush fund" tapped by him and his immediate family. Montoya paid his wife and children salaries for ill-defined jobs, paid off one son's $1-million mortgage and bought lots of luxury items, state and federal authorities allege.

And in a classic Ponzi move, he used some money from new investors to pay off worried older ones. The feds charge that Montoya used $600,000 of the $3 million in new investments he received in January and February of this year to pay off old investors.

Authorities charge that Montoya created bogus statements to try to keep his investors calm - and hide the fact that, rather than outperforming the Standard & Poor's 500 index, his funds were hemorrhaging money. State regulators, who say that at one point Montoya claimed to have $5 billion under management, allege that in 2012, he even compared himself - favorably - to Bernie Madoff when two investors raised concerns about the way their investments were performing:

When I saw the two of you last weekend, I sensed concerns from you regarding [the fund]. Your concerns seemed akin to those one might have regarding the Madoff situation, which in fact has striking difference with [the fund], in that they were not only fund managers like us, but also [SEC} Series 7 licensed broker-dealers, who are licenced to buy and sell securities not only for the fund, but also for their own clients.

Additionally, we have an outside admnistrator for our accounting functions, as well as an outside accountant for our auditing. Therefore, very much unlike Madoff, we share the various financial functions [of the fund] with outside prime brokers and accountants, who provide a reliable system of checks and balances

Montoya, authorities, charge convinced some investors to roll their 401(k) retirement funds into it. One Ohio investor trusted him with $13 million, the feds allege.

Innocent, etc.

FBI affidavit (600k PDF).
Massachusetts complaint (5.8M PDF).