Berwyn man accused of $16M Ponzi scheme

Life was good for Robert Stinson Jr. from April 2009 through last month: His company paid two $800 dinner tabs at Center City restaurants on March 4, paid for a $7,844 stay at the Breakers hotel in Palm Beach, Fla., and rented a yacht for $21,810.

The problem, according to civil charges filed Tuesday by the Securities and Exchange Commission against Stinson and his companies - including one called Life's Good Inc. - was that Stinson stole from his investment clients to pay for a luxurious lifestyle.

The SEC alleged in a 22-page complaint filed Tuesday in U.S. District Court for the Eastern District of Pennsylvania that Stinson, 55, of Berwyn, operated a Ponzi scheme that raised at least $16 million from 140 investors since 2006, including about $2.3 million from 30 investors last month.

The SEC said that Stinson, a convicted felon and repeat violator of securities laws, promised investors annual returns of 10 percent to 16 percent on real estate investments in the Philadelphia region, including short-term commercial mortgages.

But evidence is lacking that Stinson made real estate investments, according to court documents. In reality, the SEC alleged, Stinson used new money from investors to pay off previous investors and for personal expenses.

In early May, for example, Stinson and his wife spent $141,000 at Mercedes-Benz of Fort Washington, according to the dealership. Stinson's wife, Susan, paid $73,000 for a Mercedes-Benz GL sport utility vehicle. Two days later, Stinson bought a used Mercedes-Benz S550 for $68,000.

Judge Berle M. Schiller granted a temporary restraining order freezing Stinson's assets, and scheduled a hearing for July 13.

The SEC is still early in its investigation, but the alleged fraud by Stinson appears to be smaller than the $35 million fraud by convicted Ponzi schemer Joseph S. Forte. Chester County investment manager Tony Young is scheduled next month to plead guilty to a $25 million fraud.

Stinson, who could not be reached for comment, has a criminal record stretching to 1986, when he was convicted in Delaware of wire fraud and larceny. In the early 1990s, Stinson spent two years in prison for parole violations.

U.S. District Judge Joseph L. McGlynn said during the 1990 sentencing hearing that Stinson had not learned: "He's back in the same line of work. Conning people. Getting money from people through false pretenses," Inquirer article recounted.

A declaration by the SEC showed that Stinson had five convictions, the latest for bank fraud in 2001.

Four years later, Stinson founded Life's Good, based in Chesterbrook and involved in marketing health products and publishing, but the company soon spawned at least four investment funds.

Stinson's bio on the Life's Good Web site, which went off-line Tuesday after the charges were filed, said that he has a "bachelor of science degree in chemical engineering from M.I.T." A Massachusetts Institute of Technology spokeswoman said the school had no record of an alumnus named Robert Stinson.

None of Stinson's funds is registered with the SEC or other financial authorities, the SEC said. One of them, the S.T.A.B.L. Mortgage Fund L.L.C., took in 73 percent of the $16 million raised, most of it coming from self-directed individual retirement accounts, the SEC said.

S.T.A.B.L. stands for "short-term asset-based loans," with an emphasis on residential rehabilitation projects in Philadelphia, Stinson said during a November 2007 Webinar.

Stinson said that the nonprofit arm of Life's Good, Fountain Works Foundation, helped save 1,500 homeowners from foreclosure at no cost to homeowners. "We found out that by helping other people out that we could do a lot for the community, as well as ourselves," he said.