A federal judge today sentenced Raymond Montoya, 71, to 14 1/2 years in prison for the tens of millions of dollars he convinced friends and acquaintances to invest in a hedge fund that he was actually using as a piggy bank to buy expensive cars and watches and to pay off his kids' medical educations - and one of of his son's $1 million mortgage.
Exactly how much Montoya stole from investors depends on whom you ask - his lawyers say it's only about $22 million, but prosecutors say it's at least $38 million, but could be as much as $65 million.
Montoya ran a hedge fund called the RMA Fund between 2009 and 2017, when Massachusetts securities regulators sued him. The US Attorney's office charged him with security fraud last year; he pleaded guilty to three counts of wire fraud, five counts of mail fraud, and two counts of conducting an unlawful monetary transaction last October.
According to the US Attorney's office:
Montoya falsely told his investors - including his family, friends, and acquaintances who resided in Massachusetts, Ohio, and California - that the fund was earning substantial returns, when in fact, by 2014, the RMA Fund was sustaining substantial losses. The investors transferred millions of dollars of their personal savings and 401(k) retirement plans to Montoya and the RMA Fund. 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 the diverted money for personal expenses such as luxury vehicles and the mortgage on his son’s residence.
As part of his guilty plea, Montoya has handed over some $9.5 million worth of money and stuff, including luxury cars and will try to recover more than $1 million in money already paid out to some early investors, in part by asking his son to repay part of that mortgage payment and by surrendering still more cars.
The feds say he used investors' money to buy a Rolls Royce, a Lamborghini, three Porsches, three Ferraris, three Mercedes-Benzes and two BMWs. The feds also seized several expensive watches from his High Rock Way home.
A sentencing memorandum by prosecutors quoted several victims, including:
I am a single woman in my mid-40’s. I was recently laid off and was forced to go on disability after my entire savings were stolen by this man, which totaled 740,597.73. I have worked hard for the last 22 years as a pharmacist and he took every penny to my name. . . My retirement is wiped out as well as my entire personal savings.
Initial federal charges against Montoya (1.2M PDF).
Prosecutors' sentencing memo (217k PDF).
Defense sentencing mem (10.4M PDF).