Published 3:38 PM EDT Sep 20, 2018
Three men have been indicted in an alleged $364 million ponzi scheme that had more than 400 victims who funded their lavish lifestyle, featuring luxury cars, pricey homes and expensive jewelry, federal authorities said.
Kevin Merrill, 53, of Towson, Maryland; Jay Ledford, 54, of Westlake, Texas, and Las Vegas; and Cameron Jezierski, 28, of Fort Worth, Texas, face charges of conspiracy, wire fraud, identity theft and money laundering in the scheme that officials called "one of the largest ever charged in Maryland."
According to the indictment, Merrill and Ledford lured investors to buy consumer debt portfolios "through an elaborate web of lies," U.S. Attorney Robert K. Hur said in a statement Wednesday.
Consumer debt portfolios can include credit-card debts, student loans and car loans, the U.S. Attorney's Office in Maryland said.
Merrill and Ledford allegedly promised to make money by collecting payments on those debts or selling the bundles for profit.
To attract unknowing investors, the men misled their victims about from where and for how much they bought the portfolios, how much of their own money they invested and how successful they were, the U.S. Attorney's Office said.
"At times, according to the indictment, there was no underlying debt portfolio purchased with the investors’ money," the office said in a statement.
While the men did occasionally buy and sell some debt, their legitimate operations were "dwarfed by the fraudulent scheme," an SEC complaint alleges.
The men hid their scheme with fake companies and bank accounts and paid off investors with funds from other victims rather than actual profits, the U.S. Attorney's Office said.
According to the SEC, Merrill and Ledford transferred millions to their personal bank accounts. Among their extravagant purchases: Ferraris, Lamborghinis, a Rolls Royce, nine properties, 7- and 9-carat diamond rings, a 23-carat diamond bracelet and interest in a private jet.
Merrill, Ledford and Jezierski each face a maximum of 20 years in prison for wire fraud-related charges while Merrill and Ledford face an additional 20 years each for money laundering-related charges, the U.S. Attorney's Office said.
The FBI has urged the public to contact [email protected] if they think they may be a victim of the massive scheme.
"Most of these investors are just learning that they have been victimized," Hur said.
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