A California man who had tried to escape FBI agents by fleeing on an underwater scooter has pleaded guilty to wire fraud, concealment money laundering and witness tampering in connection with a $35 million Ponzi-like investment fraud scheme.
The actions by Matthew Piercey, of Palo Cedro, also involved using a phony name to rent a U-Haul storage locker, which authorities found contained a wig and ₣31,000 in Swiss francs, among other items, the U.S. attorney’s office for California’s Eastern District said last week.
Piercey, 48, used investor funds for his own purposes, including paying a criminal defense firm and buying two residences, according to authorities, who said he solicited investor funds by holding himself out as an investment advisor through his purported companies, Family Wealth Legacy and Zolla, from July 2015 to August 2020.
Piercey pleaded guilty Thursday to all 27 counts without a written plea agreement, acting U.S. Attorney Michele Beckwith announced. He is scheduled for sentencing Sept. 4.
The Chase
On Nov. 16, 2020, when law enforcement agents attempted to arrest Piercey, he led agents on a vehicle chase through residential neighborhoods and onto the highway before abandoning his truck and entering Lake Shasta with an underwater submersible device, a Yamaha 350LI Seascooter, authorities said. After about 20 minutes in the water, he emerged from the lake, where he was arrested.
After his arrest, Piercey used coded language to communicate with two jailhouse visitors, directing them to take actions with the contents of a U-Haul storage locker he had rented in Redding, prosecutors said. A subsequent FBI search of the storage locker revealed that Piercey had rented the locker under a fictitious name, Chadwick Givens, using a fake California driver’s license. The locker contained, among other things, the wig and the Swiss francs, the U.S. attorney’s office said.
A Fake Fund
Citing court documents, prosecutors said that Piercey had made false and misleading statements to investors about the nature and success of trading algorithms, commissions and fees, investment strategies, investment liquidity and the two purported companies’ financial stability.
Piercey, for example, had marketed the ostensible “Upvesting Fund,” an automated algorithmic trading fund that he falsely claimed had a history of success. He took money from numerous investors in this purported fund but privately admitted to an associate that there was no Upvesting Fund, authorities said.
Running a Ponzi-like fraud scheme, Piercey used some investor money to make payments to other investors; as the scheme progressed, he used a Redding-area chiropractor to conceal his continued operation of the investment fraud and take in new money, prosecutors said.
From the roughly $35 million invested, Piercey repaid about $8.8 million to investors, they stated. He used the other money for business and personal expenses, including paying a criminal defense firm and buying two residential properties; few, if any, liquid assets remained to repay investors, according to authorities.
When Piercey learned he was under investigation, he took steps to dissuade investors and witnesses from responding to grand jury subpoenas, causing several people to delay producing documents, while at the same time, he siphoned nearly $775,000 from victim investors into a bank account he controlled, authorities said, citing court documents.
“Investment fraud schemes like the one led by this defendant can devastate lives, retirements, and undo decades of planning by hard-working people simply looking for a trusted place to invest their money,” Beckwith said.
“Many invested their life savings with Matthew Piercey’s companies, not knowing that the claim of guaranteed returns were the empty promises of a Ponzi scheme,” said Sid Patel, FBI Sacramento special agent in charge. “The FBI agents, forensic accountants and other specialized personnel work tirelessly to ensure those who exploit the trust of a hopeful public will face serious consequences."
John Balazs, a Sacramento defense attorney representing Piercey, declined to comment.
Sentencing
Piercey faces up to 20 years in prison and a fine up to $250,000 or twice the gross gain or loss, whichever is greater, for each wire fraud and mail fraud count; 20 years in prison and a fine of up to $250,000 for each witness tampering count; and 20 years in prison and a fine of up to $500,000 or twice the value of the property involved, whichever is greater, for each money laundering count.
The sentence will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Two other defendants, Ken Winton and Gary Klopfenstein, faced charges arising from the scheme and pleaded guilty under agreements in December 2020 and July 2024, respectively, authorities said. Winton and Klopfenstein are scheduled for status conferences regarding sentencing Aug. 21.
Pictured: a Yamaha 350LI Seascooter. Courtesy photo
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