Northampton County Man, Robert McCabe Sentenced to 4 ½ Years for Bilking Family, Friends & Fraternity Brothers out of Over $1 Million in Phony Stock Scheme
PHILADELPHIA (STL.News) Acting United States Attorney Jennifer Arbittier Williams announced that Robert McCabe, 76, of Bangor, PA, was sentenced by United States District Court Judge Jeffrey L. Schmehl to four and a half years in prison, three years of supervised release, and ordered to pay $1,111,582 in restitution to more than 50 victims for defrauding them through an extensive fraudulent investment scheme.
In September 2020, the defendant was charged by Information with 21counts of various frauds, including securities fraud, wire fraud and mail fraud. McCabe, a former stockbroker who went to prison in the 1980s for securities-related fraud, pleaded guilty to these charges in November.
As part of his guilty plea, and in connection with his sentencing, the defendant admitted that for almost ten years, from September 2010 until June 2020, he defrauded life-long friends, fraternity brothers from Phi Kappa Psi fraternity at Lafayette College, and even his wife by promising to sell them “founders shares” of Esperion Therapeutics, Inc. McCabe claimed to have acquired shares of Esperion through a corporation he owned, McCabe Properties, Inc., at a very low price – approximately $2.67 per share. Over the course of nearly a decade, the defendant took in more than $1 million from more than 50 investors who thought they were getting in on the ‘ground floor’ of Esperion, by selling to them almost 387,000 phony “founders shares.” If McCabe had possessed these “founders shares” in reality, his investors would have made a fortune, as shares of Esperion peaked at more than $38 per share recently. McCabe’s investors believed they were soon going to be able to cash out their fortunes, but they were stalled at every opportunity by various misrepresentations the defendant made regarding a purported inability to liquidate their holdings. Ultimately, the defendant’s victims uncovered his fraud in June 2020, at which point he admitted to them that he had been lying all along.
“McCabe is a life-long, recidivist fraudster who preyed upon his own family and friends for nearly a decade,” said Acting U.S. Attorney Williams. “Even after being convicted of fraud previously, the defendant chose to orchestrate this scheme to defraud his victims out of more than $1 million. This type of financial fraud has devastating consequences for the victims and must be aggressively prosecuted at every turn.”
“McCabe brutally exploited the trust his lifelong friends and even his spouse placed in him,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “The FBI is committed to bringing justice to those, like McCabe, that dare to rob individuals of their hard-earned life savings. Today’s sentence cannot erase the harm McCabe caused his friends and loved ones, but we are pleased that the sentence included full restitution to McCabe’s victims. The FBI will continue to work with its law enforcement and private sector partners to investigate those who engage in similar greed-based schemes.”
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Michael S. Lowe.