BELMONT, Mass., Jan. 6 (UPI) -- The Federal Bureau of Investigation has arrested a Massachusetts investor on charges he ran an "affinity scheme" which lost investors $29 million.
Richard Elkinson was arrested in Mississippi on mail fraud charges, The Boston Globe reported Wednesday.
Elkinson, 76, allegedly used social connections – hence, an "affinity scam" – to find investors for a fraudulent uniform supply business.
In effect, he ran "a pretty good-size Ponzi scheme,'' said Massachusetts Secretary of State William Galvin.
Many of his clients were elderly Jewish members of the Belmont Country Club in Massachusetts, the newspaper said.
Some clients were referred to Elkinson through RossFialkow Capital Partners, a financial advisory firm that the FBI contends did a marginal investigation of Elkinson's business before referring clients.
Jeffrey Ross, a principal at the firm, is a former president of the Belmont Country Club.
"We saw what we thought was an attractive opportunity and referred clients,'' the firm's other principal Jay Fialkow said.
Galvin said he would file a cease-and-desist complaint against the firm to stop their brokerage activities.
