David Aldrich, founder of PLCMGMT LLC, also known as Prometheus, pleaded guilty today (November 22) to defrauding investors who were told they would get rich from lawsuits against makers of prescription drugs and medical devices.
Aldrich and James Catipay, who pleaded guilty last month, told investors that they could get their money back at any time, that funds were available to pay fat returns, and that their investments were backed by enforceable liens.
Aldrich admitted there was no money to pay redemptions or returns on investors' money. The victims were told they would rake in money from suit settlements or victories at trial. But in reality, only 1 percent of Prometheus's legal actions had been settled, and the overwhelming majority of legal actions had not gone to trial.
Aldrich pleaded guilty to conspiracy to commit securities fraud; the maximum penalty for that is five years of imprisonment plus hefty fines.