SEC accuses Berwyn man of $16 million Ponzi scheme

Life was good for Robert Stinson Jr. from April 2009 through last month: His company paid for two $800 dinners at Center City restaurants March 4; for a $7,844 stay at The Breakers hotel in Palm Beach, Fla.; and for a yacht rental of $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 last month from 30 investors.

The SEC said 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 $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," an 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 biography on the Life's Good website, which went off-line Tuesday after the charges were filed, said 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 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," he said, "that by helping other people out that we could do a lot for the community, as well as ourselves."\

To read court documents in the case against Robert Stinson Jr. and more, go to http://go.philly.com/stinson EndText