Bernie Madoff did a terrible thing with his Ponzi scheme. But at least he had fun. He had his boats and his watches and his hideous beach house, and he was living life. Not so much Brooklyn's Philip Barry, whose $40 million Ponzi scheme barely kept him afloat. According to the SEC complaint filed against him, Barry spent a portion of his investors' money on crappy real-estate purchases that he hoped would appreciate. They did not.
Per the Journal:
Prosecutors have identified about 60 properties held by Mr. Barry or one of his companies.
The government has obtained title searches or recent appraisals for 20 of the properties. Those 20 properties are valued at about $9 million, prosecutors said. However, they are worth less because Mr. Barry doesn't hold clear title to any of those 20 properties and 19 of the 20 properties are in foreclosure, the government said.
The remaining 40 properties have a combined estimated market value of slightly more than $1 million, prosecutors said.
He used the rest to pay his investors their monthly returns. And although the complaint says he "used investor funds to ... support his lifestyle," there were no fancy offices or penthouse apartments for him. According to the Daily News last month, Barry worked out of a "shabby storefront filled with shag carpeting, tattered metal office furniture and a tiny black-and-white TV," and "still lives in the $700-a-month walk-up apartment on Fourth Ave. where he grew up."
Despite him clearly being the world's worst Ponzi-schemer, the geniuses at the SEC still didn't uncover his scheme on their own. Apparently, Barry turned himself in to prosecutors last month.