On Wednesday, November 8, 2017, Acting U.S. Attorney John J. Farley announced that a Manchester, Connecticut man had been sentenced to prison for participating in a wire fraud scheme and defrauding a victim of roughly $2 million. 44-year-old Edward Hahn was sentenced to 18 months in prison for his participation in the scheme. Court records and court statements show that Hahn resided in New Hampshire and worked as an investment advisor at investment banks in Portsmouth, New Hampshire.
In early March 2009 and until July of 2010, Hahn invited one of his clients to join him in what he called an “off the books” investment. Hahn explained that he and the victim would contribute approximately $2 million each. Hahn would then loan the money to three individuals, who would ultimately repay the money within 90 days with interest above market rates. The victim was told that the “loan” would be secured by residential real estate owned by each of the three borrowers.
The victim was told that no one could know about the investment. This included Hahn’s employer, because he was not allowed to engage in financial dealings with clients outside of his employment. To prevent the employer from finding out, the victim transferred the money into a bank account belonging to one of Hahn’s relatives. The victim ultimately agreed to make several transfers to the account. He transferred $300,000, $1,600,000, $100,000, and $35,000 to the account belonging to Hahn’s relative.
The defendant later admitted that the story about the landowners was completely made up. Instead, Hahn used the victim’s money to pay personal expenses. Hahn was barred from being licensed to sell securities by the New Hampshire Bureau of Securities Regulation in 2011. The defendant also admitted that he made additional materially false representations to the victim to prevent him from reporting the dealings to authorities.
Hahn pleaded guilty to the charges. He has now been sentenced to 18 months in prison and will begin serving his sentence on December 4, 2017. Additional details can be found here.