Betraying His AA Friends Hurts Ponzi Schemer at Sentencing

After pleading guilty to engineering a Ponzi scheme that cost 23 people roughly $7 million, Bala Cynwyd resident Ira Pressman was all but certain to spend a few years in prison no matter what happened in his sentencing hearing.

The distinct circumstances of a few of those thefts, however, made certain that Pressman's attorney was trying in vain to get a sentence on the lighter end of the spectrum.

John I. McMahon Jr. argued that Pressman's years of supporting his fellow Alcoholics Anonymous members demonstrated he was someone who could find redemption. But in explaining —97 months, the maximum under federal guidelines for the array of crimes he committed—U.S. District Judge Jan E. Dubois on Friday said Pressman's AA legacy was ultimately a liability.

"Somewhat undercutting that good work is the fact you ended up defrauding two or three members of the program," DuBois said, calling that aspect of Pressman's behavior "particularly heinous."

The program

Pressman joined an AA program on the Main Line after overdosing on cocaine Oct. 22, 1988, he told the court Friday, after DuBois had heard testimony from three former friends of Pressman's who knew him through AA and lost money in his fraudulent investments. Though the victims gave their names in court, Patch is withholding their identities.

One victim who testified, a woman from Penn Valley, said she "grew to love Ira" as a fellow AA member for the past seven years. She invested with him but soon found herself losing faith, eventually screaming over the phone to him, "You really are a Bernie Madoff, aren't you?"

Added the victim, in court: "I felt like picking up a drink just to calm myself down."

When Pressman was charged, even AA members who hadn't lost money to him were unnerved, the victim said: "People cried. It was as if someone pulled the rug out from under them. ... Ira sponsored so many addicts and alcoholics."

'Most egregious'

A second victim testified, describing himself as an attorney who "was retired until this situation." He, too, had lent Pressman money in 2010 after they "developed somewhat of a friendship" in AA.

He had had problems getting Pressman to pay him back for a smaller investment in 2004, he told the court, but he had enough faith in Pressman that he, against his better judgment, borrowed against his retirement fund when he was told more capital was needed.

"He was a man who had reconstructed his life, had many years of sobriety and was looked up to for advice for many people," the victim said.

After weeks and months went on without the victim being paid back, Pressman finally told him he'd gone to the Montgomery County District Attorney's office to come clean, the victim said.

"He essentially said, 'Well, I've done some inappropriate things,'" the victim said. When asked to elaborate, Pressman told the victim his criminal attorney had advised against going into more detail, and he added that the victim could face unwelcome scrutiny of his tax returns if he reported Pressman on the federal level.

"I didn't see any sense of remorse whatsoever," the victim said.

Like DuBois, the victim took particular offense at Pressman involving AA friends in his scheme.

"People get the feeling that these are safe environments. That's the most egregious part of this situation, that a lot of people opened up and were taken advantage of," the victim said. "I really feel he should be given the maximum sentence permitted."

A third victim from AA had pre-recorded testimony on video that was shown, off the record, at Friday's hearing.

'Sacred to me'

McMahon, Pressman's attorney, pointed out that the vast majority of the victims were not in AA; Pressman himself said he knew the investors in various ways. McMahon also described a defendant who struggled with addiction beyond drugs and alcohol (such as debt and sex) and who had behaved well for the balance of his time in recovery.

"For 15 years, he lived a good life," the attorney said. "It was the last three or four years when, obviously, that changed."

Louis Lappen, representing the U.S. Attorney's Office, dismissed the "diversions" of McMahon's approach to the case.

"This defendant knew better," Lappen said. "He's a man who can operate legally and lawfully when he wants to, and when he gets in trouble, he steals."

Pressman, in forest-green prison garb, told DuBois his problems stemmed in part from the fact he had stopped going to 12-step meetings a few years ago, instead attending religious and social engagements with his wife, who is now suing him for divorce.

Though he had "done all the things you're told in AA not to do," Pressman said, he hadn't intentionally preyed on his vulnerable fellow addicts.

"I did not set out to defraud people in AA," Pressman said. "AA is sacred to me."