A tax preparer and insurance agent in the state of New York has been arrested and charged with defrauding clients by operating a long-running Ponzi scheme.
According to a press release from the office of New York State Attorney General’s Letitia James, Miles Burton Marshall of Madison County was indicted on 49 counts that included grand larceny, securities fraud, and scheme to defraud.
Investigators said that from the early 1990s through March 2023, Marshall solicited potential investors, including his tax and insurance clients, to invest tens of millions of dollars into his so-called “Eight Percent Fund.” Marshall allegedly told investors that their funds would be primarily used to purchase property, refurbish rental houses, and pay expenses for rental properties. According to the indictment, he falsely claimed that his real estate business was so profitable that he could promise eight percent annual returns to the investors.
Marshall then allegedly used investors’ money to pay investment returns to prior investors, and finance operating expenses for his other businesses, including tax preparation, printing press, maintenance, and storage unit businesses. He also is accused of using hundreds of thousands of investors’ money for personal spending, including travel purchases, expenditures at retail and online stores, and at grocery stores, restaurants, and yoga studios.
The Attorney General’s Office states that Marshall directed his staff to generate “Transaction Summaries” for investors, falsely representing their account balances and the interest they purportedly earned. Marshall’s investors relied on these false statements, believing they were earning a steady income, and continued to invest, according to the charges. As a result of Marshall’s investment scheme, many investors lost their life savings.
By 2016, Marshall’s total liabilities exceeded his assets by over $40 million. But investigators said that for the next seven years he kept soliciting new investors and telling prior investors that their investments were profitable until he could no longer repay investors. Marshall filed for bankruptcy, saying that as of March 2023 his total assets were less than $22 million and he owed 988 victim investors over $90 million, including over $50 million in principal they invested.
“For over three decades, Miles Burton Marshall fooled his community into believing he was a trusted businessman when in reality, he was scamming his clients and neighbors out of their life savings,” said Attorney General James. “Fraud of any kind is not acceptable in New York. My office will continue to ensure all those who cheat New Yorkers out of their life savings are held accountable.”
Marshall was arraigned and released on his own recognizance, and required to surrender his passport and not leave New York State. If convicted, Marshall faces a maximum sentence of up to 10 to 20 years in prison.
Lewitas Hyman 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 Lewitas Hyman at (888) 655 6002 or through our online contact form for a no-cost evaluation of your matter.
