The securities lawyers of Gana Weinstein LLP are investigating potential recovery options concerning an investment fraud scheme recently enjoined by the the Securities and Exchange Commission (SEC). The SEC recently announced it obtained a court order halting an ongoing Ponzi-like scheme conducted by Kevin B. Merrill (Merrill), Jay B. Ledford (Ledford) and Cameron Jezierski (Jezierski) that raised more than $345 million from over 230 investors. Investors dealt with the defendants entities including Global Credit Recovery, LLC (Global Credit Recovery), Delmarva Capital, Rhino Capital, DeVille Asset Management, and Riverwalk Financial Corporation.
The SEC alleged that Merrill, Ledford and Jezierski, from at least 2013 through the present, through the web of entities they control have offered and sold investments relating to consumer debt portfolios, claiming to generate significant profits through their expertise in collecting on and reselling consumer debt. However, the SEC found that in nearly every interaction with investors Merrill and Ledford misled investors about what they would do with the raised money. The SEC found that the defendants made false statements, fabricated nonexistent debt portfolios, created fake wire transfers and contracts, and founded shell companies meant to mimic legitimate companies. The SEC claimed that instead of purchasing debt as promised, investor money was largely used investor money to fund the defendants’ lavish lifestyles and prop up the scheme with Ponzi-like payments to other investors.
According to the SEC only a fraction of this money was used to acquire actual debt portfolios, and even then the acquired portfolios were different from what Merrill and Ledford had represented to the investors. Instead, the SEC found that Merrill and Ledford spent incoming cash at an alarming rate and misappropriated over $85 million for themselves. The SEC found that Ledford has transferred at least $13 million to Las Vegas casinos, used over $360,000 to purchase a Ferrari, and spent over $330,000 on a 7.32 carat diamond engagement ring. The SEC found that Merrill used investor funds to purchase at least 25 high-end automobiles for approximately $10.2 million, spent $5.5 million toward the purchase of a luxury home in Naples, Florida, and purchased an interest in a private jet for $500,000.
The SEC has accused Merrill and Ledford of having sold investments relating to consumer debt to investors to investors and advisors in states including California, Colorado, Florida, Illinois, Louisiana, Maryland, New Jersey, New York, North Carolina, Texas, and Virginia.
Our firm is investigating advisors who recommended securities related to Global Credit Recovery, Rhino Capital, or any of the other companies that Merrill and Ledford created to their clients. Under the securities laws financial advisors must conduct due diligence and have a reasonable basis for their investment recommendations. Common due diligence looks into the investment’s properties including its benefits, risks, tax consequences, the issuer, the likelihood of success or failure of the investment, and other relevant factors. When dealing with alternative investments and private equity deals due diligence can be more challenging but firms are responsible to meet those heightened challenges prior to recommending the investment to its clients.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. The attorneys at Gana LLP are experienced in representing investors in cases of financial advisors failing to conduct proper due diligenc on investments. Our consultations are free of charge and the firm is only compensated if you recover.