A trio of men were arrested on multiple charges of operating a Ponzi scheme, the funds from which the gentlemen used to buy nine homes, 26 luxury cars, a boat, jewelry, and a share in a private jet, all the while telling their clients/victims that the money was being used to buy consumer debt portfolios.
Kevin B. Merrill (53), Jay B. Ledford (54), and Cameron R. Jezierski (28) face decades in federal prison if they are found guilty.
From a statement issued by the United States Attorney's Office in the District of Maryland:
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According to the fourteen-count indictment, beginning in January 2013, the defendants perpetrated a Ponzi scheme to defraud investors of more than $364 million. The scheme was revealed with the arrests and unsealing of the indictment. Specifically, the indictment alleges that Merrill and Ledford invited investors to join them in purchasing consumer debt portfolios. “Consumer debt portfolios” are defaulted consumer debts to banks/credit card issuers, student loan lenders, and car/truck financers which are sold in batches called “portfolios” to third parties which attempt to collect on the debts. The defendants falsely represented to investors that they would use the investors’ money to buy consumer debt portfolios and make money for them by (1) collecting the payments that people made on their debts or (2) selling the portfolios for a profit to third party debt buyers--in a practice called “flipping.” According to the related complaint filed by the SEC, the victim investors included small business owners, restauranteurs, construction contractors, retirees, doctors, lawyers, accountants, bankers, talent agents, professional athletes, and financial advisors, located in Maryland, Washington, D.C., Northern Virginia, Las Vegas, Texas, and elsewhere.