In one instance, Shusterman and his firm, International Portfolio Inc. (IPI), allegedly said they had collected $56 million in "direct payments" during the liquidation of IPI debt portfolios, in order to deceive hedge funds such as Platinum Partners and Eton Park Capital Management, both based in New York; Roundstone Healthcare Partners, Acton, Mass.; and other investors. In fact, IPI had collected just a fraction of the money it claimed to have accrued.
The indictment, filed in Baltimore by U.S. Attorney Rod Rosenstein, alleges that Shusterman tried to induce Eton Park to invest by portraying four portfolios financed by Platinum as receiving approximately $28.7 million in collections. In fact, the total net collections were approximately $2 million.
The indictment seeks the forfeiture of more than $278 million and Shusterman's condominium in the Parc Rittenhouse at 225 S. 18th St.
"It was a Ponzi investment scheme," Rosenstein said in an interview. "A lot of people fall for these, and the fraudsters were sophisticated." Authorities say Shusterman and three coconspirators created phantom profits on the debt, misrepresenting the value and scope of the investment.
"This is another example of Ponzi-scheme fraudsters making claims of great returns that are 'too good to be true,' " explained Leon LaRosa, a certified fraud examiner at LaRosa & Associates in Exton. "Such claims were in the form of inflated collection results and resale values in an industry in which the health-care providers are consistently receiving lower percentages from their fees."
Calls to IPI's offices in West Conshohocken were not returned. If convicted, Shusterman faces a maximum sentence of 20 years in prison for the conspiracy and for each of nine counts of wire fraud.