An unrepentant swindler who devastated metro families was sentenced Friday to 27 years in prison, the longest sentence of its kind in federal court in Atlanta for running an investment fraud scheme.
Andrew Mackey lured in more than 160 victims who collectively invested almost $12.3 million in his Ponzi schemes, federal prosecutors said. His company, ASM Financial Funding Corp., falsely promised investors extraordinary yields from lucrative offshore deals.
He touted one of his programs, the Wealth Enhancement Club, as a great opportunity for a small and select group of sophisticated investors. But many who signed on lost fortunes.
Before imposing Mackey’s sentence, U.S. District Judge Bill Duffey noted that he had overseen a number of similar Ponzi scheme cases. But none were like this one, he said, holding aloft a thick wad of victims’ letters to show the breadth and depth of Mackey’s crimes.
Mackey’s victims were “honest, hardworking, generally not very wealthy” people, Duffey said. Many of them had invested their total life savings, some had lost their dream homes, the judge said.
Duffey flipped page after page, reading snippets: One victim had become extremely depressed. A family with four children had to move into a single bedroom of a friend’s home. Some retirees had to return to work. At least one couple split up. One already disabled man suffered a stroke and died.
Then the judge turned his gaze to Mackey. “You devastated families,” he said. “You created health problems. You ruined people’s lives.”
One victim, Don Bowen, stood before Duffey and said the fraud had put overwhelming stress on himself and his family. Now in his 70s, Bowen said, “I’ll now probably have to work until the good Lord calls me home.”
In 1987, authorities described Mackey as one of New York’s most successful pimps when he was arrested on prostitution-related charges. Two years ago, the 62-year-old father of 15 children was indicted by a federal grand jury in Atlanta on charges of running the Ponzi scheme with his common-law wife, 55-year-old Inger Jensen.
Both were convicted in July. Duffey had earlier sentenced Jensen to 14 years in prison. He ordered both to pay $6.6 million in restitution, although it seems unlikely they will be able to pay. There is no parole in the federal prison system.
Mackey, wearing a bright orange prison jumpsuit, expressed remorse that so many people lost their investments and were suffering because of it. But he said he was not criminally responsible, only a bad investor.
“The truth is I did not intend to steal,” he said. “It’s hard to hear that people feel that bitter.”
Mackey then turned to look at some of his victims and said: “I want you to know I didn’t steal your money. You guys hurt. My family hurts, too. We’re all suffering.”
But Duffey would have none of it. He told Mackey that when his investments went sour, he should have told his victims they’d lost their money. Instead, Mackey lied to them. He sent them inflated account statements to keep them on as clients and to encourage them to invest even more money, the judge said.
U.S. Attorney Sally Yates said Mackey’s sentence is the longest of its kind for such a case brought in federal court in Atlanta. “I hope this will deter would-be fraudsters and also warn members of the investing public,” she said.
Mackey put together a classic Ponzi scheme, prosecutors said. He brought in some initial investors with promises of 10 percent to 20 percent monthly gains. He then made sure to reward them with healthy returns to give his firm an air of legitimacy — and to use them as bait to lure in more investors — prosecutors said.
Among his more prominent investors was a pastor from Sharpsburg who put in $100,000 upfront and another $100,000 later, according to testimony.
When Mackey’s firm began paying steady returns to the pastor, he spread the word of his good fortune to some of his close friends.
This included a Fayette County couple who borrowed money off their almost-paid-for home so they could invest about $150,000, according to testimony. They got nothing back from their investment and later filed for bankruptcy.
Mackey also used more than 30 salespeople as intermediaries, paying them $1.1 million in commissions for recruiting new investors.
One of those lured in was a 62-year-old retired DeKalb County schoolteacher who used savings, annuities and loans to invest about $130,000 into Mackey’s program.
She lost it all.
“I still think it’s incredible that one human being can do that to other people,” the woman, who asked that her name be withheld out of concern she might be victimized again, told The Atlanta Journal-Constitution in a telephone interview. “I went in really trusting.”
The retired teacher said she had hoped to use the money to pay off her home and help her son with college loans. “That won’t be happening now,” she said.
As for Mackey being sent to prison, she said: “I can’t feel happiness about it. But he deserves what he gets.”
Mackey operated his Ponzi scheme from October 2003 to December 2007, Assistant U.S. Attorney Russell Phillips said.
All told, Mackey returned more than $5.5 million to some investors to perpetuate the fraud. What his victims didn’t know was that Mackey was taking money from some of his investors to pay off other investors. If Mackey had ever let his victims know he was going to do that, no one would have put their money into such a scheme, Phillips said.
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