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Man Pleads Guilty to Running Billion-Dollar Fraud Scheme in Florida

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Fraud is a common crime, particularly among those in the financial sector. These people deal with money on a daily basis and therefore consider themselves experts at handling it and making it. Some go beyond the tasks of their job and implement their own schemes to make money. While certain investments are legal, defrauding others of their money is illegal.

A California man recently pled guilty to charges he faced in Florida due to his billion-dollar investment scheme. On August 7, the 61-year-old man pled guilty to tax evasion as well as mail and wire fraud. He will be sentenced in October and could face 25 years in prison.

The 61-year-old man allegedly stole $1.3 billion from thousands of investors across the country. The man’s business, Woodbridge Group, had offices Florida, California, Tennessee, Connecticut and Colorado. The man would tell investors that his business held high-interest real estate loans.

In reality, the man owned the real estate himself. In some cases, the real estate didn’t even exist. The plan was similar to a Ponzi scheme, in which older investors were paid with money the man received from new investors. The man will have to forfeit assets he bought with the money, including jewelry and painting from artists such as Renoir and Picasso.

What is a Ponzi Scheme?

The first Ponzi scheme was created in 1919. Ponzi schemes were popular in the 1970s and are starting to make a resurgence in the United States. The most popular Ponzi scheme was run by Bernie Madoff. He was convicted in 2008.

A Ponzi scheme is a type of investment scam promises high returns and low risk. Like a pyramid scheme, older investors receive money from newer investors, known as dividends. The cycle continues until no more investors can be acquired. The scheme relies on a constant flow of investors (and money), and when the money dries up, the scheme unravels.

Common signs of a Ponzi scheme include the following:

  • Promises of little risk but high returns
  • Consistent financial returns regardless of market conditions
  • Secret investment strategies
  • Clients are not given paperwork for the investment
  • Clients cannot remove their money
  • Investment is not been registered with the Securities and Exchange Commission (SEC)

Ponzi schemes tend to target those with money, especially older people, since they tend to be more trusting and gullible. If it seems too good to be true, it probably is. Consult with a licensed financial advisor before making an investment.

Contact a Maryland Criminal Defense Lawyer Today 

White collar crimes and other types of fraud are often prosecuted as felonies. Such a conviction can affect you for the rest of your life. Get the right legal help on your side.

You could face prison time, fines, seizure of assets and more. A felony on your record is a serious charge. The Columbia white collar crime attorneys at the Law Offices of Todd K. Mohink, P.A. can provide the aggressive representation you need. To schedule a free consultation, fill out the online form or call (410) 774-5987.

Resource:

newschannel9.com/news/nation-world/california-man-pleads-guilty-in-florida-to-13b-fraud-scam

https://www.marylandlawhelp.com/employee-embezzlement-schemes/

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