On September 15, 2017, Brian R. Callahan was sentenced to 12 years’ imprisonment and three years’ supervised release after pleading guilty to securities fraud and wire fraud. Callahan was also ordered to pay approximately $67.6 million in restitution. Between 2006 and 2012, Callahan, who managed four different investment funds, raised more than $118 million from at least 40 investors. Instead of investing the money in mutual funds, hedge funds and other securities, as he told his investors, Callahan operated the funds as a Ponzi scheme. Callahan commingled funds from the four investment funds and paid partial redemptions to his investors while raising more money. Callahan also sent his investors false account statements. In total, Callahan misappropriated approximately $96 million, some of which was diverted into a beachfront resort and residence development in Montauk, New York, which he co-owned. U.S. v. Callahan, 13-cr-0453 (E.D.N.Y.).