A real estate Ponzi scheme has landed a social media influencer in hot water with the Department of Justice. According to the US Attorney's Office in the Southern District of Ohio, Tyler Bossetti of Columbus pleaded guilty to federal crimes, which included wire fraud and aiding in a false tax filing.
The real estate fraud, which ran from 2019 to 2023, defrauded investors of more than $20 million. Bossetti, through his company Boss Lifestyle LLC, promoted short-term real estate investments, falsely promising returns of 30% or more. Using platforms like Facebook and YouTube, he marketed himself as a "finfluencer" with over one million Instagram followers, 88,000 subscribers on Substack, and a podcast titled All for Nothing, the Columbus Dispatch reported.
Instead of investing the funds, Bossetti spent them on personal expenses and cryptocurrency. He also submitted approximately 14 fraudulent 1099-INT forms, falsely reporting interest income for investors who received no such returns. Bossetti faces up to 20 years in prison.
Bossetti's guilty plea is a reminder to advisors who seek to attract Gen Z (those born between 1996 and 2010), that those adults under 30 are more likely to use social media than traditional financial advisors in their wealth management. InvestmentNews previously reported that a Gallup poll revealed that 42% of Americans ages 18-29 go to social media for financial information, while barely over a quarter (27%) turn to financial advisors and planners.
“The percentage of young adults using social media for financial advice is stunning and truly concerning. There is so much misinformation being shared by finfluencers, and sadly this young demographic trusts what they hear,” Bridget Venus Grimes, president of the independent RIA WealthChoice, told InvestmentNews previously.
Although Bossetti's scheme is rooted in modern social media, it has its roots in old-school fraud tradition. Charles Ponzi first hatched his money-making scheme in the late 1800's using postal reply coupons. Though pyramid schemes existed before him, his name became synonymous with this type of fraud. The scheme has been rehatched by notorious individuals including Bernie Madoff and Lou Pearlman. But even recently, the New York Attorney General charged an insurance agent in the small town of Hamilton in upstate, New York with a $50 million Ponzi scheme that lasted decades.
FINRA in particular has begun to look closely at finfluencers' online communications, determining whether they were fair and balanced, or included misleading or unwarranted statements. FINRA began a sweep of social media platforms in 2021, finding 70% of communications made by firms on social media were out of compliance.
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