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Claude Darrell Mcdougal Gets 6+ Years for Securities Fraud

Claude Darrell McDougal was sentenced to 78 months in prison after pleading guilty to orchestrating a Ponzi scheme that defrauded more than 25 investors out of approximately $2.5 million.

According to court documents, McDougal solicited investments in the form of promissory notes through something called “US Financial Alliance Consultants, LLC,” a company that McDougal created in 2005. It was alleged that the promissory notes issued by the company were not properly registered to be sold in any state, and McDougal was not registered to sell securities.

In order to induce investors, McDougal was accused of promisingthat investors would receive guaranteed fixed rates of returns on their investment between 6-15% each year.

The complaint explained that many of McDougal’s victims were elderly, and some of them lost their entire life savings investing in McDougal’s Ponzi scheme.

Instead of investing the money as promised, McDougal used some of the money to issue “payouts” to other investors and used about $1.19 million to fund a lavish lifestyle, including dinners, jewelry, and hotels, among other things.

For more information on how you can guard against Ponzi schemes or scams targeting the elderly, visit some of our helpful resources:

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

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