BIRMINGHAM, Alabama – A Hoover man was charged today with fraud and money laundering in connection with an illegal Ponzi scheme in which investors lost more than $3 million, federal and state officials announced today.
Bryan W. Anderson, 40, is charged with one count each of wire fraud, money laundering and securities fraud, according to a statement issued by U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr., Alabama Securities Commission Director Joseph P. Borg and Hoover Police Chief Nick Derzis.
Anderson has agreed to plead guilty to the charges under a plea agreement with the U.S. Attorney’s Office, according to the statement.
Under the plea agreement Anderson is to pay restitution of about $3.1 million to the victims show invested in the scheme. He also agrees to forfeit that same amount to the government, as proceeds of illegal activity, along with another $368,000, which is the amount cited in the money laundering charge, according to the statement.
“For years this defendant lied about investment options, risks and potential returns so that unwitting investors would continue to put their hard-earned money into his fraudulent scheme,” Vance stated. “When his Ponzi scheme collapsed, as they always do, the people who trusted him lost millions.”
Assistant U.S. Attorney J. Patton Meadows is prosecuting the case.
Anderson’s attorney, John Lentine, said Monday afternoon that Anderson is cooperating with authorities and has already begun paying restitution in the case.
Schwein stated in the statement that the case was a “classic Ponzi scheme, as Anderson used false promises and fake returns to steal millions of dollars from his victims.”
Schwein urged consumers who are looking to invest to go to www.investor.gov , a website which helps investors recognize scams and avoid fraud.
Borg stated that “the Alabama Securities Commission is gratified to see justice imposed for the crimes that Bryan Anderson committed against innocent citizens of Alabama and other states; of course, no punishment can take away the loss and hurt to the investors who were victimized.”
The Alabama Securities Commission, Hoover Police Department, FBI and the U.S. Attorney’s Office for the Northern District of Alabama partnered on the investigation.
“I am very pleased with our department’s response in this case,” Derzis said. “After taking the initial report, Hoover investigators realized the extent of the fraud and contacted the Alabama Securities and Exchange Commission, along with the FBI. With these agencies working together, we were able to obtain Mr. Anderson’s agreement to plead guilty to his crimes and to repay the victims.”
The statement, citing court documents, states that Anderson conducted the scheme between 2009 and May 30, 2014 like this:
During most of that time, Anderson was a registered financial broker working, first, with MetLife Securities, from October 1998 to February 2012, then with Pruco Securities, from February 2012 to Sept. 13, 2012, when Pruco terminated his employment.
As part of his scheme to defraud investors, he solicited them to invest in stock options that he said employed various trading strategies. The stock options he described were not registered securities, and Anderson was not authorized to solicit investor money for the funds.
Anderson also offered investments in a company he owned, 360 Properties. Beginning about 2009, Anderson falsely represented to certain 360 Properties investors that their returns would come from leased property income, when there were no leased properties. Some of the investors believed the 360 Properties investments were affiliated with MetLife, and Anderson did nothing to correct that false belief.
Between January 2009 and January 2014, Anderson’s false investment promises caused about 18 individual and family investors to deliver more than $8.4 million to Anderson, which he deposited into an account he and his wife held at BancorpSouth, a bank based in Tupelo, Miss. When Anderson’s investment scheme collapsed in May 2014, about 12 investors lost about $3.1 million.
Anderson was operating a Ponzi scheme with investor funds, paying returns to existing investors with money from new investors, as well as paying personal expenses. He transferred investor money from one of his and his wife’s bank accounts to another, making only a small percentage of the investments he had promised investors.
The wire fraud count charges that Anderson caused an investor, identified in court documents by the initials K.C., to wire transfer $571,378 from the investor’s Wells Fargo bank account to Anderson’s BancorpSouth account in the name of 360 Properties on Jan. 15, 2014.
The money laundering count charges that Anderson took $368,000 of the $571,378 received from K.C. and on Jan. 15 transferred it by wire to a second BancorpSouth account. According to the charge, the $571,378 was “criminally derived property” obtained through wire fraud. It is a violation of federal law to engage in a monetary transaction involving money or property worth more than $10,000 that was obtained through a criminal act.
The securities fraud count charges that Anderson, on Aug. 20, 2013, fraudulently obtained $100,000 from an investor, identified by the initials T.M., by falsely representing that he would invest the money in a specific type of hedge fund. T.M. wired the money from an account at Bryant Bank to one of Anderson’s BankcorpSouth accounts and Anderson took the money and used it for non-investment purposes.
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