The Securities and Exchange Commission (SEC) shut down a Ponzi-like scheme that defrauded anywhere from 200 to 400 investors across the country. The group cheated people out of more than $345 million, according to the SEC’s website.
The group included Kevin B. Merrill, Jay B. Ledford and Cameron Jezierski. Merrill is from Maryland, and the two other men are from Texas. The men promised to buy credit card and student loan debt and then resell it to third party debt buyers. By flipping the debt, they promised investors substantial profits.
They allegedly used the money to buy luxury items
However, instead of investing the money in debt, the men allegedly used the investments to pay off earlier investors, in true Ponzi scheme fashion. Merrill and Ledford are also accused of stealing investor money and using it to buy high-end cars, expensive jewelry and luxury homes.
One investor wired Merrill $500,000 to invest, and Merrill allegedly sent $400,000 of that money to a car dealership for a down payment on Pagani Huayra Diablo. The car cost $2 million. The trio also stands accused of creating fake documents including wire transfers that didn’t occur, phony bank statements and fabricated portfolio reports.
Fraud was revealed by a tip to investigators
The fraud was incredibly complex and hard for even sophisticated investors to figure out. Investigators discovered the men’s scheme after receiving a tip last year.
Investors are being notified
Officials started to notify investors of the fraud. The defrauded investors live across the country in places like Chicago, New Jersey and Maryland.
The three men face charges of conspiracy, wire fraud, identity theft and money laundering. If convicted, the men face serious prison time.