Two Texas men are facing charges for their alleged involvement in a Ponzi scheme that defrauded hundreds of investors, according to Financial Advisor.
The U.S. Attorney’s Office for the Western District of Texas announced that Joshua Allen and Michael Cox, both of Lubbock, were indicted by a federal grand jury in connection with the case that also includes another defendant, Brooklynn Chandler Willy, of San Antonio.
Prosecutors said Allen and Cox jointly owned and controlled four investment companies: Ferrum Capital LLC, Ferrum II LLC, Ferrum III LLC, and Ferrum IV LLC, and that Allen, Cox, Willy and others acting at their direction, solicited victims to invest in these entities. Willy, who was arrested in December on separate obstruction and fraud charges, was the owner of Chandler Capital Holdings and Queen B Advisory LLC doing business as Texas Financial Advisory, which purported to provide asset management and financial planning services.
According to the indictment, Allen, Cox and Willy misled investors about the security of the investments and concealed their high commissions. Allen and Cox are also accused of lying about the nature of the investments. The U.S. Attorney said that hundreds of victims collectively lost millions of dollars with much of the money going to pay earlier investor-victims, thus concealing the scheme and attracting more victims. Much of the money also directly benefitted the defendants and their associates, prosecutors said.
Allen, Cox, and Willy are each charged with conspiracy to commit wire fraud, conspiracy to commit money laundering, conspiracy to launder monetary instruments, and securities fraud. At the time of her arrest in December, Willy was also facing charges of obstruction of, and attempt to obstruct an official proceeding, false statement, and aggravated identity theft.
If convicted on all charges, the three face up to 70 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Hyman Cotter PC routinely represents investors harmed when financial professionals and their firms engaged in misconduct that caused their clients investment losses. Our team includes lawyers who have worked for large financial institutions, including Morgan Stanley and UBS Financial Services, and regulatory bodies such as the SEC. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Hyman Cotter PC at 312-291-4600 or through our online contact form for a no-cost evaluation of your matter.
