New York prosecutors have accused a former Georgia businessman of operating a multimillion-dollar Ponzi scheme, the latest in a string of allegations of investment fraud stretching back a decade.
Steven Canady now faces nine criminal charges after being indicted for operating a Ponzi scheme. Prosecutors allege that Canady, who now lives in New York, paid for his lavish lifestyle by stealing $2 million from clients.
One alleged victim was a Georgia company, Global Capital Advisors Ltd. Canady, in his role as owner of Alliance Warburg Capital Management, allegedly promised Global that if it would invest $150,000 in one of his ventures, it would get a fat return in 30 days — even if his venture failed. Prosecutors say Canady used that money to pay a previous victim.
Neither Canady’s attorney nor Global Capital could be reached for comment.
In a Georgia case that prosecutors said involved similar crimes, Canady pleaded guilty in 2013 in Carroll County to three counts of theft by taking, according to court records. The victims were a Carrollton church and two men. Canady pleaded guilty to all three counts under the first offender act and got 10 years probation, court officials said. He was also ordered to pay $630,000 restitution.
Canady, now 42, came to the attention of securities regulators as early as 2004, when he operated various businesses in Atlanta.
In 2005, Missouri said that a Canady company, Canady Holdings, was operating a Ponzi scheme. The company promised some Missouri residents they would receive a 1,000% return on their money in 30 days, regulators said. The case resulted in a cease and desist order and a civil fine.
In 2007, Connecticut's banking commissioner investigated the activities of Canady and his company Bayou Technologies. It found they were violating securities laws and issued another cease and desist order.
In the New York case, Canady now faces four counts of grand larceny in the second degree; four counts of criminal possession of stolen property in the second degree; and one count of scheme to defraud in the first degree.