A Devine Ponzi Leads to Prison and $2 Million Restitution

January 12, 2012

Jenifer Devine, 40, of Fair Lawn, NJ, was the owner of Devine Wholesale, a business that supposedly had something to do with clothing and electronics - maybe, perhaps, sort of . . . who knows? One thing is clear, there wasn't much divine about this company.

25% Returns

From December 2008 through September 2010, Devine through Devine Wholesale solicited investors for her company, telling them she would use their money to fund her wholesale clothing and electronics business. In order to induce these investors to make 30- to 60-day investments, Devine promised returns of up to 25 percent per investment.

Okay, so, someone offers you a 25% return on a one to two month investment.  Maybe, just maybe, you take a hike at this point - after all, who in their right mind could afford to pay such vig and, more importantly, how could such an offer even be real?  Alas, when confronted with the glimmer of huge, unbelievable returns, some folks fail to properly focus on that "unbelievable" aspect.  Too bad.

In response to some questions from potential investors, Devine showed them false and fraudulent inventory lists of products she was purportedly reselling. Ummm - what? I'm worried about how you can pay me 25% a month and you're showing me the products that you're going to sell?  Wouldn't it have been easier to sell this stuff on EBay or Amazon? No way this would seal the deal, right?

What do I know.

More than 15 investors sent over $8 million to Devine and her company during this time period.  I'm definitely in the wrong line of work!

Surprisingly?

Not surprisingly, it turns out that Devine Wholesale was not a legitimate business. Even less surprisingly, it turns out that the investors' funds never went towards the purchase of clothing or electronics.  Here's a list of where some of the proceeds went:

  • principal and interest payments to existing investors (ah, yes, the old Ponzi!);
  • a personal Royal Caribbean cruise; and
  • personal purchases at luxury retailers such as Burberry, Gucci and Coach.

Devine's Fall From Grace

On November 30, 2010, Devine was arrested and charged in a criminal Complaint with one count of wire fraud.  If convicted, she faced a maximum potential penalty of 20 years in prison and a fine of up to $1 million.

In accordance with a subsequent criminalInformation and her guilty plea, on January 11, 2012, Divine was sentenced in the federal District Court inNewark, NJ to 37 months in prison; three years of supervised release;  and ordered to pay restitution of $2 million.