Stockbroker pleads guilty to stealing $6 million in Ponzi scheme

A former broker who left the securities industry more than a decade ago and then started what prosecutors described as a $6 million Ponzi scheme has pleaded guilty to fraud charges. Sunil Sharma, 68, faces 20 years in prison on charges that between 2008 and 2014, he raised $8.36 million from 32 investors to pursue a risky day-trading strategy using options. When the strategy failed, he repaid old investors with contributions from new investors, federal prosecutors said. Mr. Sharma also faces possible fines and restitution. He's scheduled to be sentenced by a U.S. district court judge in San Diego in August. Officials said he also took $2.5 million in investor money for his personal use, including $700,000 for a down payment on a house, about $12,000 for a Mediterranean cruise and leases on a BMW and Mercedes SL. He ran out of money in January despite sending statements to investors showing gains. (More: SEC files fraud charges against two advisers for allegedly falsifying credentials) Mr. Sharma, of Carlsbad, Calif., was a A.G. Edwards, Merrill Lynch and Raymond James-affiliated broker. But he relinquished his license after his clients suffered in the U.S. stock market rout that followed the September 11 terrorist attacks, prosecutors said. Prosecutors said he would later remake himself as an insurance salesman and, after attending a 2007 workshop on options trading, promoted a strategy he managed through his firms Gold Coast Holding and Safe Harbor Tax Lien Acquisitions as a conservative way to enhance returns. U.S. attorney Laura E. Duffy said the Ponzi scheme “was a bit harder to detect than usual as Sharma did not promise his investors outlandish returns,” according to a statement. Mr. Sharma's lawyer, Earll M. Pott at Klinedinst in San Diego, did not respond to a request for comment.