Jay Lucas of Portsmouth and Manhattan admitted guilt on Friday to securities fraud, investment adviser fraud, wire fraud, and money laundering connected to a plan that gathered more than fifty million dollars from backers by claiming the funds would support early stage health and wellness firms, based on a statement from Jay Clayton, U.S. Attorney for the Southern District of New York.

Lucas, 71, who ran as the Republican nominee for governor in New Hampshire and lost in 1998 to current U.S. Sen. Jeanne Shaheen, founded and led Lucas Brand Equity LLC, a private equity fund located in Manhattan.

Lucas shifted much of the money toward personal costs, unrelated projects, and Ponzi style returns to prior backers, the statement noted.

One project involved purchasing the Claremont Eagle Times newspaper in 2022 through The Sunshine Project aimed at local renewal. The paper shut down last summer after claims that staff went unpaid.

Lucas admitted guilt to one count of securities fraud, one count of wire fraud, and one count of money laundering, each carrying up to twenty years in prison, plus one count of investment adviser fraud with a maximum of five years, per the statement. A judge will decide the actual sentence at a later hearing.

Lucas misled investors to secure millions for private equity funds he set up, vowing to place their money in growing health and wellness firms, said U.S. Attorney Clayton.

In truth, Lucas directed much of the money to personal costs and unrelated projects while making Ponzi style returns to other investors. This plea shows the ongoing effort by this office and partners to hold investment advisers accountable when they misuse client trust for personal gain, Clayton added.

Lucas founded and leads LBE along with three funds: Lucas Brand Equity LP, L.B. Equity Emerging Growth LP, and L.B. Equity Wellness Growth L.P. Starting in 2017, Lucas defrauded investors through repeated misuse of their money, the statement said.

Lucas described LBE strategy as investing in small to mid size emerging brands, adding services to set them apart, and driving growth toward an exit.

Lucas collected over fifty million dollars from investors yet spent much of it on personal items such as alimony, rent, a personal newspaper effort in his hometown, and political advisers. He also used fresh investor money for earlier backers in Ponzi style, profiting himself while leaving the funds and companies short of capital.

Lucas also directed investor money to Immunocologie, a luxury skincare firm run by his wife, without revealing the conflict. Much of that money went to trips, events, and other unprofitable activities. Lucas also set up majority ownership in Immunocologie through LBE rather than the funds, keeping the equity for himself instead of clients.

Lucas actions left the funds short of capital and unable to meet basic costs like staff salaries. Inside the firm, workers voiced ongoing concerns, noting the spending was not for LBE, was literally fraudulent, and represented a major betrayal of investor trust that was likely illegal, the statement said.