The U.S. Attorney’s office for the State of Connecticut said John H. Goldsmith, 57 of Shelton, pleaded guilty Monday in federal court to one count of securities fraud involving a $300,000 investment fraud scheme.
Goldsmith was arrested in December and was facing charges on two counts of fraud. He initially pleaded not guilty but changed his plea to guilty this month.
The scam, according to prosecutors and the FBI, evolved over a five year period. At first, Goldsmith told an investor he was starting a magazine geared to teens and was arranging for a deal to market it at schools. Then he told the investor, the magazine idea was acquired by a company and now it was going to be a video sharing service in which teens would compete against each other. The final allegation came after Goldsmith allegedly told investors Sallie Mae bought his company through a subsidiary and that Goldsmith could now buy shares of Sallie Mae at deep discounts and was taking money to buy the shares from those investors.
He used the money to pay bills, buy toys and even made a donation to Little League with it.
Goldsmith met his alleged victims through personal friendships and work on a Trumbull election. He faces up to 20 years in prison and a fine of $5 million. Goldsmith will be sentenced on May 21.