Troy man accused of Ponzi scheme

PHOTOGRAPHER: Michael Lamendola

A Troy man is accused of bilking senior citizens and other investors out of at least $3.5 million through a Ponzi scheme, according to the federal Securities and Exchange Commission.

The SEC on Tuesday charged Matthew J. Ryan with operating a Ponzi scheme through American Integrity Financial Co. The SEC obtained an emergency court order to freeze the assets of Ryan and the other defendant, Prime Rate and Return, which also does business as American Integrity. Ryan is the founder, owner and sole managing member of Prime Rate, according to the SEC.

According to the SEC, Ryan and Prime Rate used American Integrity to raise more than $6.5 million from investors — many of them in their 60s and 70s — since 2002.

As of March 31, the SEC said, American Integrity owed investors at least $3.5 million and had less than $8,500 in cash on hand.

Ryan, 45, was a registered broker-dealer and operated out of a branch office of a registered broker-dealer located in Troy. He sometimes operated under the name Matthew J. Ryan & Associates.

Ryan allegedly promised investors guaranteed fixed rates of return ranging from 3.85 percent to 9 percent annually. The SEC said Ryan fostered the false impression that American Integrity was a legitimate, substantial financial services firm with numerous employees and he was an employee. The SEC said he also falsely offered safe, even guaranteed, investments, including qualified individual retirement accounts.

To perpetrate this fraud, the SEC said in court papers, Ryan used a phony Manhattan address and fictitious names and titles of purported American Integrity employees. He also allegedly misrepresented to investors that their investments were safe and insured by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. He also told investors that American Integrity was qualified to offer IRAs and other tax-deferred investments, according to the SEC.

The SEC said American Integrity “is merely the name on a bank account that Ryan opened and controls.” According to the SEC, “Ryan simply took investors’ money and deposited the money into the bank account. When he needed money to pay investors the returns he had promised or principal amounts they sought to withdraw, Ryan simply withdrew funds from the same bank account.”

The SEC alleges Ryan used investor funds to pay real estate lenders on properties he and Prime Rate owned and to pay for his own personal expenses, including luxury cars.