BOOTHBAY HARBOR, Maine — A Boothbay Harbor man arrested by federal law enforcement authorities in September and charged with bilking friends and family out of $3.4 million will be sentenced Tuesday in U.S. District Court in New Haven, Conn.

Garrett L. “Denny” Denniston, 63, formerly of Newtown, Conn., faces a maximum sentence of 20 years in prison for the nearly decade-long scheme.

Denniston, who was taken into custody Sept. 19, 2012, at his Maine residence, pleaded guilty in February to one count of wire fraud. According to the plea agreement, he stipulated that from “at least” 2005 to 2012, he operated an investment fraud scheme and solicited money from investors by representing himself as running a successful business, ConsensusOne, that specialized in mergers and acquisitions.

Denniston offered investors a “friends and family” deal to purchase stock options that he said would yield a guaranteed return on investment, but instead used the funds to pay for “airfare, hotels, restaurants, country club membership fees, mortgage and rent payments” and other expenses including remodeling costs at his Boothbay Harbor property, according to court documents.

Prosecutors argue that Denniston “prepared fake legal documents, forged signatures on those documents, incorporated shell companies, opened and used multiple bank accounts, transferred large amounts of money between and among bank accounts, and misused confidential non-public information regarding companies with which he had confidential consulting arrangements.”

Denniston defrauded at least 54 victims of more than $3.4 million, according to a sentencing memo from prosecutors. All of the victims reside in Connecticut and all of them allegedly were told by Denniston over the course of years that their money would be returned, with profits.

“What is perhaps most notable about this fraud is that the defendant targeted his closest friends and family in the course of his scheme, convincing his lifelong friends to give him large sums of money for phony investments,” the memo states.

The offense carries a maximum sentence of 20 years and a fine of $250,000.

Denniston’s attorney have requested a sentence of four years, arguing “diminished capacity” due to their client’s mental illness — bipolar disorder as well as prescription drug, alcohol and marijuana abuse.

Prosecutors have requested 8-10 years.

BDN reporters Christopher Cousins and Judy Harrison contributed to this report.