David McQueen, of Byron Township in Michigan, was found guilty of 15 felony charges, including those involving money laundering, mail fraud, and failure to file taxes. McQueen is accused of running a $46 million Michigan Ponzi scam that bilked over 800 victims. Many of them gave him their retirement money, cashed in IRAs, and mortgaged their homes so they could invest.
McQueen, a former insurance salesperson, began investing people’s money in Multiple Return Transactions, which promising investors 10% returns. It wasn’t until later that he found out that the MRT was actually a Ponzi scam. However, instead of telling investors in his company, Accelerated Income Group, that MRT was a scam, he told them their funds were secure and growing. He then found new investors and took their money to pay off earlier investors.
According to Assistant U.S. Attorney Matthew Borgula, McQueen paid himself a salary of $100,000 from investor funds. He also gave these customers bogus account statements to make them think that their investments were profitable. The government said that when McQueen discovered that his Michigan Ponzi scam was about to fail, he took 30% of the investors’ money and placed them in highly speculative investment and other scams.
In December, Trent Francke, McQueen’s business partner, pleaded guilty to federal charges, including securities fraud, conspiracy to sell unregistered securities, and failure to file a tax return over income. He agreed to testify against McQueen.
According to the plea deal, McQueen, Francke, and others ran several investment funds, including Accelerated Investment Group, International Opportunity Consultants, Diversified Global Finance, and Diversified Liquid Asset Holdings. They told investors that their money would be placed in real property, forex trading, and projects involving ethanol, and others. Francke said that they knew that they were selling investment plans without providing information or a prospectus that explained the risks involved.
Ponzi scams can lead to huge losses for investors who think that they are making money when actually a fraudster is just giving them another investor’s money. If you were the victim of a Ponzi scam you should speak with a securities fraud law firm right away. You may be able to recoup your losses.
Investors detail how they lost savings to West Michigan duo’s alleged $46.5 million scam, MLive.com, December 28, 2011
Read the Indictment (PDF)
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Texas Man Gets 25 years in Prison for $11M Ponzi Scam, Stockbroker Fraud Blog, April 21, 2014
US Supreme Court Hears Oral Argument on the Impact of SLUSA on the Stanford Ponzi Scams, Institutional Investor Securities Blog, October 17, 2013