The Securities and Exchange Commission said Wednesday that it has obtained a court order halting an ongoing Ponzi-like scheme that raised more than $345 million from over 230 investors, some of whom were current and former pro athletes, retirees and financial advisors.
The SEC also obtained an emergency asset freeze and the appointment of a receiver.
The SEC complaint, unsealed Tuesday, alleges that Kevin B. Merrill, Jay B. Ledford and Cameron Jezierski attracted investors to their scheme by promising significant profits from the purchase and resale of consumer debt portfolios.
In a parallel action, the U.S. Attorney’s Office for the District of Maryland announced criminal charges Tuesday against Merrill, Ledford and Jezierski.
Merrill, 53, is from Towson, Maryland; Ledford, 54, lives in Westlake, Texas and Las Vegas; and Jezierski, 28, lives in Fort Worth, Texas.
From at least 2013 to the present, the trio operated the Ponzi-like scheme that involved, among other things, “securities offerings rife with misrepresentations, fake debt, forged signatures, fabricated wire transfers, the movement of millions of dollars into personal accounts, and an elaborate scheme wherein defendants offered and sold investments in the same (and often fictitious) debt and/or debt portfolios, to multiple victims,” the complaint states.
Of the $345 million raised, more than $90 million was invested by over 200 individual investors; approximately $52 million by family offices; and nearly $203 million by feeder funds, largely made up of groups of individuals.
The individual investors included small business owners, restaurateurs, construction contractors, retirees, doctors, lawyers, accountants, bankers, talent agents, current and former professional athletes and financial advisors.
The SEC also alleges that Merrill and Ledford stole at least $85 million of the investor funds to maintain lavish lifestyles, spending millions of dollars on luxury items, including $10.2 million on at least 25 high-end cars, $330,000 for a 7-carat diamond ring, $168,000 for a 23-carat diamond bracelet, millions of dollars on luxury homes, and $100,000 on a private fitness club.