Pledge With an Edge
Pledge With an Edge
A man who ran a $300 million ponzi scheme has been indicted on charges of defrauding more than 500 people in 17 states. He promised to pay interest as high as 36% on investments in companies that make short-term, high-interest loans. Investors were told that the money would be invested in Cash 4 Titles and similar companies that provide high-interest loans to borrowers who pledge their car titles and future payroll checks as collateral.
Almost none of the investor funds went to Cash 4 Titles or to any other company engaged in providing 'car title loans' or making 'payroll check advances'. Instead, he used some of the money to pay off previous investors but transferred the bulk of it to an offshore account at the Bank of Bermuda.
Prosecutors are seeking the forfeiture of more than $25 million that he earned off the scheme, along with titles to his homes. They also seek forfeiture of the title and interest he held in a commercial aviation company.
A settlement between the Bank of Bermuda and victims of the Cayman-based Ponzi scheme received approval of the courts 10/12/01.
While continuing to deny liability, the settlement agreement provides for a payment of up to 50% of actual out of pocket losses to investors in Cash 4 Titles, although the total payment, including all court approved fees and expenses, is not to exceed $67.5 million.
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