New York Tax Preparer Charged in $50M Fraud Scheme

The indictment charges Marshall with multiple counts of grand larceny, securities fraud and scheme to defraud.

“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,” James said in a statement. “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.”

Beginning in the early 1990s and continuing 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, prosecutors said.

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 James.

"When soliciting investments, he falsely represented the profitability of his real estate business, claiming it was so profitable that he could promise investors eight percent yearly returns," James' office states.

After soliciting investments, Marshall allegedly used investors’ money to pay prior investors and finance operating expenses for his other businesses, including tax preparation, printing press, maintenance and storage unit businesses.

The indictment also alleges that Marshall used hundreds of thousands of investors’ dollars for personal expenditures, including travel purchases at American Airlines, Priceline and United Airlines, at retail and online stores, such as Amazon, Lululemon and Target, and at grocery stores, restaurants and yoga studios.

"To further his scheme, Marshall allegedly directed his staff to generate 'Transaction Summaries' for investors, falsely representing their account balances and the interest they purportedly earned," according to James' office. "Marshall’s investors relied on these false statements, believing they were earning a steady income, and continued to invest. 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.

"Still, he continued to solicit new investors and represent to prior investors that their investments were profitable for the next seven years until he could no longer repay investors, and filed for bankruptcy," James' office states. "Marshall made sworn statements in the bankruptcy proceedings 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."

Marshall was arraigned before Judge Rhonda Youngs and released on his own recognizance, required to surrender his passport and not leave New York state.

If convicted, he faces a maximum sentence of 10 to 20 years in prison.

James thanked the Financial Industry Regulatory Authority and its Criminal Prosecution Assistance Group, the Securities and Exchange Commission and the New York State Police for their assistance in the investigation.