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Man behind investment scheme heads to prison

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Guy Gane
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By Eileen Buckley

http://stream.publicbroadcasting.net/production/mp3/wbfo/local-wbfo-986297.mp3

Buffalo, NY – The man behind a multi-million dollar investment scheme is headed to jail.

U.S. District Judge William Skretny sentenced Guy W. Gane, Jr., 56, of Clarence, to 13-years in prison Wednesday.

Gane pleaded guilty in December of 2010 to his role in a massive investment fraud case where the fraud was estimated to have exceeded $5.8 million. The defendant admitted guilt to both mail fraud and money laundering charges.

Gane convinced customers that they were investing in waterfront property in Maine. Some lost their life savings in his Ponzi scheme.

In his plea, Gane admitted defrauding investors from 2006 until May 2008, when federal agents executed a search warrant and the SEC filed a civil action in federal court.

The defendant acknowledged that the scheme involved promising high returns to investors on "debenture" investments or "promissory notes".

Jan Borman was a victim of Gane's misleading investments. She lost $100,000.

Gane was supposed to be sentenced in March. The delays left Borman feeling anxious that there was an attempt to prevent Gane from going to jail. But when judge Skretny issued the sentence, Borman finally felt vindicated.

"Three years and four months ago I was put in to a financial prison and now, Guy Gane should go and be in a physical prison where he has to pay because we are not going to see restitution," said Borman.

Upon imposing the sentence, Judge Skretny told Gane he was a "wolf in sheep's clothing" and that the lives of those he cheated have been "forever altered because of your actions."

Some of Gane's victims were in the courtroom Wednesday. The judge issued the sentence despite Gane's public apology to the victims.

One Lockport resident told the Buffalo News he lost $55,000 to Gane.

"This is the second substantial fraud case in as many days," said U.S. Attorney William Hochul. This case and others should serve as a warning to the public of just how necessary it is to be cautious and vigilant when turning over your hard earned money to any investor. It is important to know exactly who you are dealing with and always keep in mind that if something sounds too good to be true, it probably is."

Gane had been charged, along with Ian Campbell Gent and James Lagona, with operating an investment fraud scheme in connection with financial service firms M-One Financial and Watermark Financial Services Group, both of which Gane owned.

Gane admitted that he falsely told the investors that their money would be used to invest in waterfront real estate and in building dormitories in Maine. In fact, no such investments were made, as Gane used the money to pay back earlier investors; to pay salaries to himself and his employees; to advance cash to his children; and for other personal and business expenses. The loss suffered by the investors totals over $5,000,000.

Lorenzo Altadonna also plead guilty to charges last year relating to this scheme.