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Edward May Pleads Guilty to $35 Million Ponzi Scheme

Edward May, founder of E-M Management Co. LLC (E-M), pled guilty last week to a ten-year, $35 million Ponzi scheme ("Edward May pleads guilty to operating Ponzi scheme that bilked investors out of $35 million," Crain's Detroit Business, April 29, 2011). Investors defrauded in the investment scheme resided in states throughout the country, including: Michigan, California, Florida, Illinois, New York, Ohio and New Jersey. According to the article, May - through E-M - solicited investments in his LLCs by claiming that the companies held telecommunications contracts with several major hotel chains. The contracts supposedly guaranteed income of $30,000 - $100,000 per month to each company. Unfortunately for investors, the contracts never existed, and investments in the company were used to make Ponzi-style payments to previous investors. May was indicted in October of 2009 on 59 felony counts of mail fraud. Two years before the indictment, in 2007, the SEC filed a complaint against May. In the complaint, the SEC alleged that May, through E-M, solicited as much as $250 million in a fraudulent investment scheme. May was also accused of making false promises to investors, which included a "guarantee" that they would receive, at a minimum, returns paid in monthly payments for the first 20 to 24 months after the initial investment was made. On January 7, 2010, a U.S. District Court judge issued a final judgment against May, which included an order to pay $37 million in disgorgement.May's plea confessed to all 59 counts of fraud. He is scheduled to be sentenced on August 11.

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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