A Brick Township, New Jersey man has been sentenced to 30 months in federal prison for committing mail fraud while fraudulently inducing people to invest in his companies that purported to market and sell “hurricane straps” to hold down homes, boats and other large things of value, U.S. Attorney Christopher Christie announced.
U.S. District Judge Anne Thompson also ordered George F. Gaffney, 41, to serve three years of supervised release upon the completion of his prison sentence and to pay $673,000 in restitution to 180 victims.
On Feb. 3, 2004, Gaffney pleaded guilty to a one-count Information charging mail fraud. At his plea hearing, Gaffney reportedly admitted that he solicited investors to buy stock in his companies with promises of a solid rate of return, dividends and the prospect that his companies would be bought by a large corporation. Gaffney admitted that, in fact, his companies never had a public stock offering and that he used much of the investor money for his own use.
Gaffney admitted that he induced investors by promising a 10-percent return and payment of monthly and quarterly dividends, and that he had entered into major capital investment deals. To perpetuate the fraud, Gaffney promised to refund investors’ money upon 30 days’ written notice and sent them phony stock certificates, according to the one-count Information to which he pleaded guilty.
Gaffney said during his plea hearing that he held a patent for his “hurricane straps,” which purported to anchor structures such as boats and cars to the ground in order to minimize damage in high winds.
The defendant had three companies: Hurricane Straps Inc., incorporated in 1996, and Hurricane Products Inc. incorporated in 1998, and Hurricane Protection Products L.L.C., incorporated in 2000.
Gaffney admitted that he sold stock in the hurricane companies to investors, even though he was never licensed as a stock broker or dealer with the federal Securities and Exchange Commission or with any state. He also admitted that the stock was not registered with the SEC.
Under U.S. Sentencing Guidelines, Judge Thompson determined Gaffney’s sentence based upon a formula that takes into account the severity and characteristics of the offense, and the defendant’s criminal history, if any. Parole has been abolished in the federal system. Under Sentencing Guidelines, defendants who are given custodial terms must serve nearly all that time.
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