Sunday, January 30, 2011
Multimillion-Dollar Ponzi Scheme Roils the Orthodox Jewish Community of St. Louis
Motivation for the scheme allegedly was to impress his father-in-law and his new bride.
These days, Joshua David Gould of University City dances in a Statue of Liberty costume to lure customers toward an income tax preparer. But the 31-year-old Orthodox Jew knows how to sing, too. To the feds, that is.
Gould, a former securities broker for Woodbury Financial Services, recently came clean to authorities and admitted to stealing millions of dollars from dozens of his coreligionist clients over the past two years. (The total may be around $4 million, according to several sources.)
Gould is also the son-in-law of Jonathan Spetner, the well-respected third-generation operator of Spetner Associates, a local insurer).
No federal charges have been filed yet against Gould, and Assistant U.S. Attorney Hal Goldsmith isn't talking. But records show the Missouri Commissioner of Securities is looking into him.
And now the young man's attorney, Al Watkins, acknowledges that in the late fall of 2010, Gould "self-reported his crimes" to investigators and is "fully cooperating."
But why did he do it? The answer, Watkins says, involves enough intrigue for a 90-minute movie.
Gould grew up in Milwaukee and arrived in St. Louis in 2002. Within a couple years, he was working for Jon Spetner, whose daughter, Temima, he soon married.
Gould badly wanted to impress his father-in-law and provide his new wife with the standard of living she'd grown up with, as Watkins tells it. So when a pair of businessmen offered the young man a large chunk of change to invest in mid-to-late 2007, Gould jumped on it.
However, that money -- which eventually added up to $1 million -- had come from a third party, who was promised a high rate of return. Gould invested, but didn't make enough to fulfill that expectation.
So first, he raided his family trust, of which he was a trustee. Then he started skimming off the accounts of the clients he'd picked up as a broker for Woodbury Financial, for whom he'd begun working in October 2008 (this was separate and distinct from his employment at Spetner, records show).
"He was robbing Moishe to pay Saul," says Watkins.
Yet Watkins acknowledges that Gould did much more than that: He enriched himself too, using the stolen money, for example, to remodel his kitchen and pay the mortgage on his Amherst Avenue home, which sits in the Orthodox neighborhood of west University City.
Gould also dropped "tens of thousands" in east-side strip clubs, Watkins confirms, but hastens to clarify: Gould was majority owner of at least one online sports ticket broker called The Sports Nook.
Says the attorney:
"He was entertaining people that were going to help him in the Sports Nook and also potential clients for his financial clients. Let's not pretend that my guy was wearing a nun's habit while this was going on, but at the same time, do not assume the tens of thousands were spent for his own gratification. This was atypical behavior of a desperate man."
Gould was desperate for money from The Sports Nook, Watkins explains, because his work at Woodbury wasn't meeting the demands of the middle men who'd provided him that load of investment capital back in 2007.
When Gould suggested they all admit to the man who'd originally put up the money that Gould couldn't meet his end of the bargain, the middle men made "an explicit threat against his life and safety," Watkins insists.
Watkins declines to identify these middle men. But he does say they were "perpetrating a much bigger fraud" in "an unrelated segment of the financial industry," and his client, Gould, helped the government's investigation into that.
Mayer Klein, the lawyer who represents Gould's father-in-law, Jonathan Spetner, tells Daily RFT that his client feels "terrible" about what's happened. Spetner knows many of the victims, and is trying to help them recoup their losses by appealing to Woodbury Financial, which is a subsidiary of The Hartford Financial Services Group.
"Woodbury has responsibility for what their representative does," Klein says. "They're a fine company. We hope that they will make these people whole. The hope is that it won't require litigation."
Woodbury Financial has not responded to several requests for comment.
None of the individual victims have filed a civil suit against Gould. However, one of them did submit a written complaint to the Financial Industry Regulatory Authority, alleging that the broker stole almost $700,000 from that victim's account alone.
Watkins says of Gould: "This is a young man who for the first time in over two years is able to wake up without living beneath the shroud of one lie upon another. He has deep personal remorse and a religiously-based commitment to doing right for those people from who he has stolen."