A criminal case against three men accused of running a $364 million Ponzi scheme serves as a reminder to investors in Louisiana to choose their money managers carefully. A federal investigation in Maryland has resulted in the arrest of three men and charges of wire fraud, money laundering and identity theft. Convictions on any of these charges could produce 20-year prison sentences.
According to the 14-count indictment, the men attracted investors by lying about investment returns. They were supposed to buy defaulted debts that would be sold supposedly at a profit to other parties. Many individuals, including doctors, accountants, professional athletes and bankers, reportedly gave the men money to invest in debt trading, but the men allegedly spent the money on themselves. Investigators collected details about the men spending $74 million on luxury homes, fancy cars, boats and diamond jewelry. They also allegedly gambled away $25 million at casinos. The indictment called for the forfeiture of the recoverable assets.
Investigators identified 30 companies and 55 bank accounts used by the men. These entities allegedly played a role in their complicated communications with investors to exaggerate returns and mask what was happening with the money. In addition to criminal charges, the Securities and Exchange Commission has prepared a civil lawsuit against the alleged offenders.
Sentences for perpetrators of Ponzi schemes tend to be harsh. That’s why a person embroiled in allegations of white-collar crimes might want legal advice before answering questions from investigators. An attorney could strive to protect a person’s rights and counteract aggressive prosecution. The attorney’s opinion about the strength of the evidence could help the defendant choose between standing trial or seeking a plea deal.