A Weston business owner was sentenced Wednesday to nine years in federal prison for his involvement in a Ponzi scheme that siphoned more than $6.4 million from his victims and into his bank accounts, federal prosecutors announced Thursday.
David J. Varrone, 56, was the CEO of The Credit Engineers, the company he and his co-conspirators used in the scheme from 2018 through 2021. His wife, Sherry D. Varrone, also previously pleaded guilty to her role and will be sentenced in April, according to prosecutors.
Varrone purported to be a “self-made billionaire” in order to get victims to lease their credit to him through the company, which Varrone would then use to apply for high-interest loans, court records said. The victims believed they’d receive a monthly payment in exchange.
The money went into the victims’ bank accounts before they transferred some, if not all, to Varrone’s company or his and co-conspirators accounts, court records say.
The victims believed their investments were tied to a hedge fund that would guarantee they’d be fully repaid in 36 months or less, prosecutors said.
“In fact, there was no hedge fund and the victims’ funds were never invested as promised,” prosecutors said in a news release Thursday. Varrone used the money for himself and to repay previous victims.
Varrone used money fraudulently obtained from Economic Injury Disaster Loans, meant to help businesses during financial hardships caused by the COVID-19 pandemic, to fund the scheme and his lifestyle, court records said. From August 2020 to March 2022, Varrone and his co-conspirators received nearly $650,000 from the loan program.
He pleaded guilty to conspiracy to commit wire fraud in December. Judge Raag Singhal ordered him to pay over $3.5 million in restitution and entered a forfeiture judgment on his home in Weston and a bank account with the proceeds from the COVID-19 loans he fraudulently applied for and received, according to prosecutors.
Sherry Varrone will be sentenced on April 3 in Fort Lauderdale.
