By John Burton
RED BANK — A borough man, working as a financial advisor, has been sentenced to seven years in federal prison for defrauding investors of more than $9 million in a Ponzi scheme, according to the U.S. Attorney’s Office.
Authorities said Maxwell Smith, 73, created a sham entity called Health Care Financial Partners and told investors their money would be used for loans to health-care facilities, like nursing homes. Rather than investing the money, Smith used it for personal expenses, including dining, entertainment, gambling and international travel, though he used some of the proceeds to return to some investors, purporting it as earnings on their investments, according to the U.S. Attorney.
Smith previously pleaded guilty in federal court to a five-count indictment charging him with mail fraud in connection with the scheme.