Brian Callahan, one of two men charged in 2013 in connection with a $96 million Ponzi scheme involving the Panoramic View resort in Montauk, is among 1,499 people whose sentences were commuted by President Biden on Thursday.
"The nearly 1,500 individuals who received commutations today have been serving their sentences at home for at least one year under the Covid-era CARES Act," according to the White House. "These Americans have been reunited with their families and shown their commitment to rehabilitation by securing employment and advancing their education."
Mr. Callahan, a former investment funds manager, and his brother-in-law, Adam Manson, had purchased the Panoramic View through a limited liability company, Distinctive Ventures, in 2007 using proceeds from a "Ponzi scheme orchestrated" by Mr. Callahan, according to the United States Attorney's Office for the Eastern District of New York.
Between December 2006 and February 2012, that office said, he "raised more than $118 million from at least 40 investors in connection with four different investment funds that he managed." Rather than putting his investors' money into "mutual funds, hedge funds, and other securities," he instead diverted it to the Panoramic, with Mr. Manson helping to "hide the fraud from the funds’ independent auditors."
It was "one of the largest Ponzi schemes in Long Island history," the attorney's office said at the time.
Mr. Callahan pleaded guilty to wire fraud and securities fraud in 2014. He was sentenced in 2017 to 12 years in prison and three years of supervised release. Senior United States District Judge Arthur D. Spatt ordered him to pay more than $67.6 million in restitution.
“For years, Brian Callahan peddled lies to unsuspecting investors, causing some to lose their life savings, and to delay their retirements,” Acting United States Attorney Bridget Rohde said in a 2017 release from the office. “Callahan has now been held to account for his deceit and the harm he caused.”
In a sale overseen by the federal government, the property, with its motel units and townhouses, was bought for $63.9 million in 2015 by Panoramic Partners L.L.C., an affiliate of BLDG Management, which owns Gurneys Resort and Seawater Spa. The $40 million in net proceeds was forfeited to the government to help repay victims of the Ponzi scheme. The property is now known as Gurney's Residences.