Alleged Ponzi mastermind on the run from FBI hid in lake with sea-scooter, collared after he surfaced half-hour later
- Reference: 1605688331
- News link: https://www.theregister.co.uk/2020/11/18/ponzi_suspect_submarine/
- Source link:
Matthew Piercey, 44, of Palo Cedro, California, was arrested on Monday after he was [1]charged with 31 felony counts, including wire fraud, mail fraud, attempted witness tampering, and money laundering, according to prosecutors.
He took an unusual route to court.
When the FBI swooped this week to nab him, Piercey managed to get away and sped through residential streets and onto a highway in his truck, heading toward California's Lake Shasta, we're told
[2]PDF
. Agents raced after him in vehicles and a helicopter. Piercey eventually abandoned his ride, and jumped into the cold lake on a Yamaha 350LI, an underwater scooter capable of cruising at a top speed of 3.7 miles per hour.[3]
Not a great plan ... The underwater scooter ... Source: FBI. Click to enlarge
He disappeared out of sight, and left a trail of bubbles that was easy to spot, agents said. After 25 minutes below water, presumably using some kind of breathing equipment, he finally emerged, and was promptly arrested by the patiently waiting Feds. His wife gave the agents a change of clothes for him to put on.
The indictment
[4]PDF
against Piercey, filed in a US federal district court in eastern California, claims he ran a five-year Ponzi scheme that swindled investors out of $35m. With an accomplice, Kenneth Winton, he set up two companies: Family Wealth Legacy LLC and Zolla Financial LLC, the Feds alleged. The duo used these operations to persuade several investors that their funds would be used in algorithmic financial trading, and that they would get their money back with profit, we're told. Instead, the pair spent the money on things like credit card expenses, a boat, and houses, it is claimed.When investors asked for their money back, the duo allegedly wheeled out a string of lies to delay coughing up the dosh. Piercey would also pay early investors with money obtained from new customers, it is claimed: a classic Ponzi scheme. He even lied to his investors when he was subpoenaed, and said he was being investigated “due to his outreach to the President with a bold proposal to rescue the country’s banking system,” it is claimed.
“Beginning in or about July 2015, and continuing until at least in or about August 2020, the defendant Matthew Piercey, Kenneth Winton, and others known and unknown to the Grand Jury knowingly devised, intended to devise, and participated in a material scheme and artifice to defraud and obtain money by means of materially false and fraudulent pretenses, representations, promises, half-truths, and omissions, and the concealment of material facts,” the prosecution's court filings stated.
Now, Piercey has been detained and is considered a “serious flight risk,” although possibly not an underwater one. Winton has also been charged with conspiracy to commit wire fraud and is expected to attend a court hearing on Thursday.
The pair will have to forfeit their property and pay back the millions they owe, if any is left, as well as face up to 20 years in prison, if convicted. ®
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[1] https://www.justice.gov/usao-edca/pr/shasta-county-and-butte-county-residents-charged-35m-ponzi-scheme
[2] https://regmedia.co.uk/2020/11/18/fbi.pdf
[3] https://regmedia.co.uk/2020/11/18/sub.jpg
[4] https://regmedia.co.uk/2020/11/18/piercey.pdf
[5] https://whitepapers.theregister.com/
Re: Liabilities exceeded assets?
They exceeded his liquid assets anyway...
"pay back the millions they owe"
As if that had a chance to happen. They've spent the money, nobody is getting anything back.
The only money left is in the house and, if he was smart enough to put it in his wife's name (probably not), not even that.
Re: "pay back the millions they owe"
well, he could sell his wife. Or a bridge he owns...
Re: "pay back the millions they owe"
Doesn't matter whose name it's in if it's the proceeds of crime.
Re: "pay back the millions they owe"
The smart move would be to put the millions into BitCoin, encrypt it with a strong password, copy it onto multiple media (USB keys, hard drives, DVD-R discs, whatever), and distribute those media to friends / family / associates. When you get out of prison, go visit all your old friends and see (a) who bothered to keep the device, and (b) who is willing to return it to you for the lowest fee.
Of course, all this relies on knowing exactly when the cops are coming and having the time to perform all the steps above before you're caught. Most criminals are greedy and prefer to spend the money immediately on tangible goods, rather than invest for the long-term.
Sounds like he was a dick but...
...fancy get-aways always facinate me. Shame for him he never had a sub setup. He could of climbed in that and stayed under for a long time with no bubbles. Although, as it's a lake and I assume they saw him go in, he wouldn't of been able to go anywhere. I also assume a mini sub would probably wipe out the $35million
Re: Sounds like he was a dick but...
> also assume a mini sub would probably wipe out the $35million
A rebreather scuba setup doesn't release bubbles, and whilst more expensive (and requiring greater maintenance) than an air tank and regulator, it doesn't cost millions.
Of course, that's only a part of the getaway plan... you need advance warning to defrost the decoy dummy corpse and dress it in your clothes, then make your way to the underwater entrance of your pre-built hideout.
Underwater flight risk?
I hate to say it, but he obviously thought he was a penguin.
Using shell companies to transfer and obfuscate debt between them masquerading it as profit while abusing fresh income to obfuscate and cover this up? Sounds like he may be more than reaching out to Trump, he could be his chief accountant.
Nah, Trump's setups all look pretty standard.
If you want to see a _real_ shitshow, though, check out BLM / Black Lives Matter (you know it's originally and still primarily a company, right? Pretends to be a charity but doesn't actually do anything except accept donations and pay dividends.)
If you've had any exposure to money-laundering or tax-sheltering/income-hiding, you'll recognise its funding structure immediately.
Liabilities exceeded assets?
He was, most definitely, underwater.