Maryland Man Arrested for Engaging in Ponzi Scheme
Ponzi schemes first became popular in the 1920s. Nearly a century later, people are still luring others into these schemes. These schemes use investments from new investors to pay older investors. The common theme is “robbing Peter to pay Paul.”
These schemes defraud people and are therefore illegal. This white collar crime can result in felony charges and many years in prison.
A Maryland man has pled guilty to orchestrating a huge Ponzi scheme. In fact, it was one of the largest ever in the state, raking in $394 million. Of that, $248 million was returned to investors.
The 53-year-old man from Towson engaged in the scheme from 2013 to 2018. The man orchestrated the scheme with help from two partners in Texas. They invited investors to buy defaulted consumer debts that are sold to collections agencies.
The man and his partners pretended to be making money for investors through debt payments. Instead, they were using money from other investors to pay the original investors. The scheme impacted people from all walks of life. Lawyers, doctors, professional athletes, small business owners, bankers and retirees were among the victims. They lived all over the country, including Maryland, Chicago, New York, Texas, Denver and Virginia.
The man and his business partners created several fake business names to conceal their operations. They also falsified wire transfer records and forged signatures.
The man used proceeds from the scheme to buy artwork, jewelry, collectibles and a share in a jet plane. He purchased multiple properties in Maryland. He also bought a $10.5 million home in Florida, as well as 25 vehicles.
The scheme came to an end in May 2018. The man and a partner thought they were meeting with an investor in Dallas, Texas. The “investor” turned out to be an FBI agent.
The man was taken into police custody in September 2018 and has been detained since then. The U.S. Securities and Exchange Commission froze all the man’s assets. He faces several criminal charges, including identity theft, wire fraud, money laundering and conspiracy to obstruct justice. He faces up to 40 years in prison and a fine of $500,000. As part of the plea agreement, he is ordered to pay restitution to the victims and forfeit all property he purchased with the money. His wife also faces charges of conspiracy to obstruct justice. She has since been released.
One of the man’s partners, a 28-year-old man from Texas, pled guilty and has been released. Another partner, a 55-year-old man from Texas, is scheduled for arraignment soon.
Contact a Maryland White Collar Criminal Defense Lawyer Today
Ponzi schemes, embezzlements and other white collar crimes are attractive to many people because they often bring in significant amounts of money. Even though these crimes are not violent in nature, they cause financial and emotional harm to unsuspecting victims.
White collar crimes are often punished harshly. The Columbia white collar crimes lawyers at the Law Offices of Todd K. Mohink, P.A. can help reduce your charges. We have two offices in Maryland to serve you. Schedule a free consultation today. Call (410) 774-5987 or fill out the online form.