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A Williamsburg woman was sentenced Monday to five years in prison and three years of supervised probation after embezzling over a million dollars from friends and others between 2009 and 2015.
Patricia Means, 70, has also been ordered to pay over $1,136,862.32 million in restitution to victims of the scheme and the Internal Revenue Service after pleading guilty to wire fraud and money laundering June 13, according to a United States Department of Justice news release.
Means, a retired investment broker, worked in the industry for over 20 years, the release said. Around February 2009, she developed a Ponzi investment scheme for a product called the “Savvy Bag,” a handbag organizer.
According to the U.S. Securities and Exchange Commission, a Ponzi scheme is “an investment fraud that pays existing investors with funds collected from new investors. Ponzi scheme organizers often promise to invest people’s money and generate high returns with little or no risk. In many Ponzi schemes, the fraudsters do not invest the money. Instead, they use it to pay those who invested earlier and may keep some for themselves.”
According to the release, Means used the scheme to raise funds for the development of the Savvy Bag, going to “substantial lengths to make the investment seem plausible, including having a seamstress make a prototype, setting up a website, applying for a patent, producing bound and printed copies of a brochure containing marketing and advertising information, and sales and profit projections.”
According to an indictment filed in court, Means solicited $1,118,779 in investments for Savvy Bag. As investors began to question the status of their investments, Means provided various false and fraudulent explanations for the lack of returns, the indictment stated.
According to the indictment, some of the explanations given by Means included that her husband “was undergoing various different surgeries; that funds were held from release by Homeland Security; and that contracts were not being paid by Savvy Bag customers.”
Means spent over $900,000 on housing, casino trips, vehicles and other personal items, soliciting money from various people, including some who had been her friends for a decade or more, the release said.
“The majority of the victims who invested their hard-earned savings were retirees or approaching retirement,” the release said.