NEW YORK (WSJ/CBS12) — Federal prosecutors have charged financier Paul Regan with orchestrating a massive investment fraud scheme that defrauded more than 300 investors out of at least $50 million, according to newly unsealed court documents.
Regan, who operated through two companies—Yield Wealth and Next Level Holdings—is accused of running the businesses like a Ponzi scheme, using funds from new investors to pay earlier ones and to line the pockets of sales agents.
Prosecutors allege Regan promised “guaranteed” returns of up to 15%, luring clients with fake assurances, including false claims about investment insurance. In one instance, an investor was told the insurance worked like a “bulletproof vest,” offering complete protection. However, investigators later found that the proof of insurance was often forged or didn’t exist at all.
The Securities and Exchange Commission (SEC) filed a parallel civil lawsuit after the criminal indictment was unsealed last week. Regan had been indicted on securities and wire fraud charges back in April, following an investigative series published by The Wall Street Journal.
According to prosecutors, investors’ funds were rarely used as advertised, and instead were funneled into personal expenses and other unauthorized uses. Compounding the deception, Regan failed to disclose that he had previously been barred from the securities industry for forging documents and stealing $140,000 from a dementia-stricken elderly client.
Many of the investments in Yield and Next Level were illegally sold by unlicensed insurance agents, some of whom were under intense financial strain and eager to earn high commissions—some reportedly as high as 21%.
Despite growing scrutiny, Regan reportedly dismissed the allegations to his team and urged them to continue business as usual.
Authorities believe Regan is currently residing in Colombia, and a federal court in New York has authorized the indictment to be shared internationally to aid in his arrest and extradition.
