A Bronx man pleaded guilty Monday to operating a $4.8-million Ponzi scheme out of his family’s tax-preparation firm, New York State Attorney General Eric Schneiderman said Tuesday.
Robert Van Zandt, of the Van Zandt Agency, solicited funds from clients for investment in securities and real estate projects that were instead diverted to personal uses and paying other investors, authorities said. In exchange for his guilty plea, Mr. Van Zandt will be sentenced to between 3 years and 8 months and 11 years in prison, according to the attorney general’s office.
For decades, the Van Zandt Agency was a well-known Bronx tax preparation service, authorities said. In 2007, Mr. Van Zandt started accepting investments from clients, some of whom gave him their life savings with promise of high rates of return, officials said. This side business turned into a “purely Ponzi-style scheme” in 2008, Schneiderman’s office said.
Mr. Van Zandt’s attorney, Michael Bachner, said his client “truly regrets the financial harm he caused to investors,” many of whom had been clients for a decade or longer. “Regrettably, after the financial collapse in 2008, Mr. Van Zandt unsuccessfully tried to recapture investor losses by selling securities that were not registered for sale in New York State,” Mr. Bachner said.
Mr. Van Zandt was arrested in 2012 and charged in a 35-count indictment that included two counts of securities fraud, 29 counts of grand larceny and two counts of scheming to defraud; two money laundering charges were later dismissed.
A civil lawsuit filed against Mr. Van Zandt by the Attorney General’s Investor Protection Bureau is still pending. That suit seeks $35 million in restitution for more than 250 investors defrauded in the Ponzi scheme, including the 29 named in the criminal indictment. Investors were cleaned out of funds ranging from $25,000 to $900,000.
Mr. Van Zandt is set to be sentenced on January 5, 2014.
His son Robert Van Zandt Jr. — an ex-con with ties to former Mafia boss Vincent (Vinny Gorgeous) Basciano — shot himself in the head and was found floating in his Yonkers swimming pool shortly after the investigation was launched. The son was a part-owner of the tax prep business.