WASHINGTON—Federal prosecutors have accused three men of portraying themselves as investment professionals and using a phony portfolio of consumer debt to defraud hundreds of unwary investors out of tens of millions of dollars as part of a $364 million Ponzi scheme.
Kevin Merrill of Maryland, 53, Jay Ledford of Texas and Nevada, 54, and Cameron Jezierski of Texas, 28, misused millions of dollars to maintain a lavish lifestyle, according to an indictment unsealed on Sept. 18 in a federal court in Baltimore.
The indictment charged the three with conspiracy, wire fraud, identity theft, and money laundering.
The indictment says that from 2013 onward, the men offered individuals, family offices and funds an opportunity to invest in consumer debt portfolios that they claimed generated profits by collecting debt payments or by selling the debt to third parties. Instead of deploying the investments as promised, the defendants made payments to earlier investors while funding their own lavish lifestyle, prosecutors said.
“The defendants lured investors and defrauded their victims with a web of lies, duping them into paying millions of dollars toward buying bundles of debt people owed on student loans and their credit card debt,” U.S. Attorney for the District of Maryland, Robert Hur, said at a news briefing on Sept. 19.
“It’s been ten years since the 2008 financial crisis and it is easy to forget the financial system is one built on trust,” he added.
The defendants defrauded at least 400 victims in the Baltimore area, Virginia and in Texas, Gordon Johnson of the Federal Bureau of Investigation’s Baltimore Field Office told reporters at the same briefing.
Merrill and Ledford spent tens of millions of dollars on luxury cars, jewelry, houses, boats, private jets and gambling at casinos, according to the indictment.
By Michelle Price & Katanga Johnson