The U.S. Department of Justice recently announced indictments for an investment fraud scheme allegedly perpetrated by three men. Jay Ledford of Las Vegas, Cameron Jezierski of Fort Worth, and Kevin Merrill of Maryland allegedly victimized investors through an elaborate Ponzi scheme that took upward of $364 million from over 400 unsuspecting investors. The three men were charged in a 14-count indictment that included identity theft, conspiracy, wire fraud, and money laundering.
Victims of the investment fraud Ponzi scheme included small business owners, doctors and lawyers, professional athletes, financial advisers, and retirees in various states across the country. According to federal charges, the defendants allegedly lured investors into the Ponzi scheme by promising them high rates of return on their investments with fake companies set up to flip debt for a profit. The men are charged with creating fake businesses with names similar to actual brokerages and consumer debt sellers, then opened bank accounts under those names. As investor funds came in, the three men allegedly spent an estimated $73 million on luxury cars and boats, a jet plane, extravagant home renovations, and gambling trips to casinos.
Jay Ledford and Kevin Merrill allegedly invited investors to purchase consumer debt portfolios, defaulted debts that are sold in batches to third parties who attempt to collect the debts.
Most of the investors involved in this Ponzi scheme have just recently learned that they were victims of investment fraud. The defendants allegedly created false financial documents and collections reports and forged signatures on bank transactions to deceive investors. If convicted of investment fraud charges, all three men face a maximum prison term of 20 years for money laundering and wire fraud conspiracy. Jay Ledford and Kevin Merrill also face an additional mandatory two-year prison term for identity theft, consecutive to any other sentence, if they are convicted.
Although the defendants weren't registered brokers, investors may be able to recover their losses if a registered representative recommended they invest with the trio. Victims of investment fraud schemes involving FINRA-registered representatives working for a broker-dealer can often recover damages by retaining an investment fraud attorney. Recovery for damages may include investment principal, expected gains if money had been properly invested, arbitration costs, attorney's fees, and punitive damages for egregious broker misconduct.