Property taxes are insane in Westchester County, NY. I don't condone what this guy did, but I can empathize with his desperation.
Plenty of brilliant people when given other people $ to manage started of with good intentions - a few bad trades start cascading loses, a few bills start stacking up and next thing you know you have a full blown Ponzi scheme. Not using a legit RIA that is using a reputable fiduciary for hosting the account & book keeping is asking for problems. When people used to ask me if I would manage their $ the answer was hell no! I would explain that I am extremely unqualified, lacking state & federal licensing and it would impose great risk of ruin to you the investor and me the trader.
Why do people like this think they'll get away with it? They have to be aware that sooner or later their investors will come asking about their money.
It`s denial & living in the now... Like some have stated, they all start with sincere intentions & delusions of grandeur... They compound their disasters quickly by averaging losers, quickly arriving at the "praying stage" of train wreck of a position. Ego is the most dangerous trait of all as they simply attempt to "trade their way out" because someone oh so intelligent with a shit sheepskin from Stanford could not possibly this wrong, this often.... so the story repeats itself many times over.
That's what the person that I knew in that situation told me several times..."man, I just thought I could trade my way out of it".
The sad thing is he spent $2.9M on himself over 5 1\2 years. That's about $500K a year, around what he could have somewhat honestly been making if he'd stayed at MS.
Yeap, most of the losses went to bad trading and early investors cashing out on non-existing gains. Maybe some of those can be recalled...