A Rock Hill, S.C., broker-dealer has pleaded guilty in federal court to mail fraud in connection to a multi-million dollar, decades-long Ponzi scheme.

Oren Eugene Sullivan, 63, admitted in court that from 1995 through 2008 he ran the scheme, selling fake investments to 35 different individuals or groups of investors, according to the U.S. Attorney’s Office in South Carolina.

Sullivan told his clients that he was managing their investment accounts, paying small dividends to his investors, but was actually converting their invested money for his own use, according to officials. He would pay investor dividends with money received from new victims of the scheme.

The U.S. Attorney’s Office alleged that through the scheme, Sullivan netted $2.5 million from his victims. The scheme was detected by one of Sullivan’s investors, who reported him to authorities.

FINRA recently barred Sullivan for misappropriating what it said was $3.7 million from more than 30 clients, including 15 widows, two Alzheimer’s victims and an individual with developmental impairments.

FINRA noted that Sullivan, a broker for New York Life Securities from 1988 to October 2008, mislead victims into believing they were investing in legitimate financial products from the company or its affiliates, but used their money for personal expenses, including cars and tuition for his children’s private schools.

In May 2009, the South Carolina Department of Insurance revoked Sullivan’s license after he failed to reply to an order giving him the right to appeal allegations of misappropriation. State regulators said they had evidence that as an employee of New York Life, Sullivan misappropriated $10,000 from a customer, failed to secure a policy for the customer and presented the customer with a fraudulent disciplinary letter intended to prevent his client from reporting him to New York Life.

Evidence was also received by state regulators from Sullivan’s former employer that he borrowed funds from multiple customers in the amount of $2 million, which resulted in settlements between these customers and New York Life.

There is no set sentencing date for Sullivan, but when he reappears in federal court, he faces a maximum fine of $250,0000 and the possibility of up to 20 years in federal prison.

(IFAwebnews.com: by Keith L. Martin)