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Allston man gets 14 1/2 years for stealing tens of millions in investment fraud

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).

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Comments

So this is the guy responsible for all the traffic jams. He’s driving 13 cars!

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By Anthony Trollope. The Way We Live Now https://en.wikipedia.org/wiki/The_Way_We_Live_Now

"Nevertheless a certain class of dishonesty, dishonesty magnificent in its proportions, and climbing into high places, has become at the same time so rampant and so splendid that there seems to be reason for fearing that men and women will be taught to feel that dishonesty, if it can become splendid, will cease to be abominable. If dishonesty can live in a gorgeous palace with pictures on all its walls, and gems in all its cupboards, with marble and ivory in all its corners, and can give Apician dinners, and get into Parliament, and deal in millions, then dishonesty is not disgraceful, and the man dishonest after such a fashion is not a low scoundrel. Instigated, I say, by some such reflections as these, I sat down in my new house to write The Way We Live Now."[1] --Trollope, An Autobiography, chapter XX

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Not previously aware, but this may be one of those eternal truths, spot on!

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Although written well over a hundred years ago, the ideas are still as valid today.

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are always so fascinating to read/hear.

I wonder if this will get the "American Greed" treatment?

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Said distant relative, Tony Montoya...

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Good post, Friartuck. Post more.

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You called the Feds on my father. Prepare to die.

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Is this the same guy who owns those eyesores on Harvard Avenue between Barrys Corner and Cambridge Street? The one that used to have a pet care center?

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Different last names and all. I think you're referring to Tony Montana., not Montoya.

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I prefer to deposit money in banks. Sure it's a lowly 2.5% interest rate, but i wouldn't be out $740k.

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Where are you getting that? In a CD maybe, but that's only in the last year or so. most banks give folks a savings rate of 0.09%. But yes there are online savings accounts that can earn you 2.25% now. It is a shame most people don't know about them.

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why on earth would you spend all that money on cars, and yet still choose to live in a college housing section of brighton?

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WBUR just reported that it is 14 1/2 months :/

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WBUR clearly got it wrong.

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Are there any that aren't a scam? First the iScream guys in West Roxbury now this.

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Why is he getting punished because because of the stupidity of other?

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You'll see that people invested with him because he lied, repeatedly and, obviously, persuasively - and that he then used a fair amount of that money on his car collection and his kids' education, rather than investing it as he promised.

It's great you're so all knowing that you've never been deceived by somebody you know and trust (it's not like he was advertising in the Globe), but there are laws against that.

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I watch "American Greed" all the time and it hurts me to listen to the victims rehash their situation, it's always the same case...."He promised me a great return on my money"....."I got my family/friends to invest too".......I wish someone got in the ear of the victims and said the 20% return or whatever is too good to be true.

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I feel very sorry for the people who were taken in by him.

If you have more than about $50,000 or so in investments you should have them in at least two places. Never, ever, trust someone with all of your assets. Not your brother, not your wife, absolutely not your business partner. When it comes to money, it makes people do crazy things. (total aside-I watched an amazing movie last night Embrace of the Servant about native peoples in the Amazon 100 years ago. A wise native medicine man rejected money saying it leads to no good. One of best movies I've seen in years)

I like to think of myself as reasonably intelligent and I've lost money to some well known con artists when I was in my 20's (worked with the State Police to put them in jail), and again in New Orleans to some guy trying to start a bar. It happens, be wary.

Maybe Stevil will weigh in, he is always telling me to diversify more.

As always, if it seems to be too good to be true, it probably isn't.

And don't trust and Verify!

(which is why we need an independent audit of our cities money!)

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Any investments you make should be held at a real financial institute, ideally solely as a custodian with a 3rd party acting as the investment advisor. that way, you have two parallel books to review monthly/quarterly. If everything is on the level, the two statements will be in line.

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Add in a Auditor from one of the big four as well.

Biggest mistake lotto winners make is usually going with Vinny down the road as their money manager, and never lawyering up and using the bigger institutions that are accountable and can be sued to recover their screw ups.

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But most people should just invest 80% in stocks and 20% in bonds. They should use low cost ETFs like VTI and BND or ITOT and AGG to make these investments. Folks can purchase these with no trading costs from different brokerages- Vanguard, Fidelity, Schwab and others. The expected return over 20 - 30 years is about 6-7% a year, which when it compounds can turn a small investment into a nice chunk of change.

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This is the problem...regular people don't know what a ETF or VTI or BND is. That is what makes it confusing and allows for a schemer like this guy to take advantage of people.

I opened my first Fidelity account this year and it is confusing!

https://www.bloomberg.com/opinion/articles/2019-03-22/etf-fee-wars-are-n...

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An ETF is an exchange traded fund. Investopedia.com is a good site for learning more about an ETF. VTI and BND are the tickers for two types of ETFs. VTI invests in the total US stock market and BND in the total US bond market. Our behavior of greed and fear causes us to buy and sell too often and at the wrong times so it's best to set up automatic investments and then forget it. Betterment is actually a great company for this. They make it easy and relatively cheap to do, plus you can set it and forget and avoid all of the behavioral snafus. I would highly recommend Betterment.

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the finance bros JUMPED OUT in this thread.

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You would do well to listen to the finance bros my friend.

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I'd listen to the finance bros if

1) I could actually stand to being around men who work in finance.

2) I wasn't so against dismantling capitalism.

I would take advice from Wu Tang Financial though. Protect ya neck and diversify ya bonds!

Capitalism
Ruins
Everything
Around
Me

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The finance bro's want you in bitcoin, hedge funds, and penny stocks.

Low fee ETFs/ Vanguards are boring as sin, but you'll be able to retire because you didn't gamble away your money, or worse, trusted someone else to gamble it away for you.

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And they will.put you into ETFs. Lots of effective low cost ways to invest but the big cost today is the advisor him/herself. They often charge 1% of the portfolio or more which comes out of your return. If they are using mutual funds, that's usually another 1%.

Keep advisory fees low, fund fees low, don't buy annuities or cash value life insurance unless you thoroughly understand the product and be willing to get rich slowly and you'll be fine.

A good adviser is worth their weight in gold (maybe literally). A bad one is just a lead weight.

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Are you serious? Last I checked, stupidity wasn't a crime, but fraud and theft were.

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sounds like a weird word that a crying liberal would say.

i'm being ironic; of course basic human evil is afoot. you can't avoid this by voting for a corporate democrat. must pacify the gun-sucking psychos, that way lies peace.

apician

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Stories like this remind me of just how important it is for basic finance to be taught in school. I know it will not prevent all financial schemes (some of madoff's victims were pretty sophisticated investors), but a bit of financial literacy will go a long way. Most of these schemes are too good to be try from the jump, but sadly most people don't have the understanding and awareness to spot when they are being taken for a ride.

or, alternatively, it would be a great benefit to us all if people had a better understanding of compound interest and how it is digging our financial graves.

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Ad nauseoum....

Every high school in the city would have a one semester financial literacy class.

Only a clown would vote for someone like that!

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Maybe some of the 80% on the rolls who didn't show up could have helped him out too.

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sometimes all the financial education in the world can't save you from having your judgement clouded by the trust you inherently feel for your friends and family. when one of them decides he's going to exploit that trust, it can be hard to step back.

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