BALTIMORE — Attorney General Brian Frosh announced the convictions of Eugene Fusting and Christopher Fusting relating to their operation of a Ponzi-like investment scheme between 2012 and 2019.
Eugene, 79, would solicit friends and family to "invest" in what he called a "family and friends," "income", or "trust" plan, claiming that he and his son Christopher, 52, were operating an investment fund.
Eugene claimed the funds would be pooled and guaranteed the principal and a certain, though differing, rate of return. Many claims were made, but there was actually never a pooled investment fund nor any investment plan.
According to the Attorney General's office, the funds obtained, which was over $800,000, were instead spent by the Fustings on personal expenses such as mortgage payments, credit card bills, vacation rentals, swim club memberships and private school tuition.
“This father-son team stole money indiscriminately from elderly investors and from family and friends,” said Attorney General Frosh. “The Fustings operated a fraudulent scheme and depleted the savings of their victims to support their lifestyle.”
Both Eugene and Christopher held brokerage accounts in their individual names at an online securities brokerage firm where they would wire a portion of the funds they received. Instead of using the funds for investing, the brokerage accounts served as a conduit for an investor fund, where investors' money sat until the balances on the Fustings' individual accounts waned.
The investment scheme also operated as a Ponzi scheme, and when an investor would demand a return of their funds, Eugene Fusting would solicit additional “investors,” and utilize those new funds to repay previous investors.
The AG's office also states that neither of the Fustings had any additional income source, they relied on the stolen funds to support their lives.
Much of the money stolen was from elderly investors, whose retirement savings were depleted entirely.
Eugene and Christopher were found guilty of Theft Scheme Over $100,000 and Conspiracy to Commit Theft Scheme Over $100,000 after pleading guilty in the Circuit Court for Baltimore City. They were sentenced to 30 years in prison, all of which were suspended.
Eugene will serve 18-months of home detention and Christopher will serve 12-months of home detention. Both of the Fustings will serve will serve 5 years of supervised probation and pay restitution in the amount of $808,745.00
