A Maryland man indicted last year on charges of running a debt buying Ponzi scheme has agreed to plead guilty to those charges as well as one that he attempted to obstruct justice after he was arrested and is facing 40 years in prison.
Kevin Merrill, who, along with Jay B. Ledford, and Cameron R. Jezierski, were indicted last year for taking $394 million in investments, which were used to pay off other investors and fund lavish lifestyles for the three alleged conspirators. Merrill agreed last week to plead guilty to charges of wire fraud and conspiracy to commit wire fraud, as well as attempting to obstruct justice by working with his wife to hide assets from a safe in their home and conceal assets from the court. Jezierski has already pleaded guilty and is awaiting sentencing. Ledford is facing a re-arraignment next month.
The trio are accused of creating fake companies, such as Delmarva Capital, Global Credit Recovery, LLC and Rhino Capital Holdings, and falsifying bank statements and manufacturing phony sales agreements to make their actions seem legitimate. Prosecutors allege the three men spent more than $73 million of the money to buy houses, gamble in casinos, and make other extravagant purchases.
Originally tipped off that the Federal Bureau of Investigation was looking into his actions, Merrill voluntarily contacted the FBI and invited an agent to meet, where he lied and provided false documents. Later, an FBI agent pretended to be an investor willing to invest $10 million and met with Merrill and one of his partners.
About $250 million of the invested funds have been returned to investors, according to the published report.
The trio convinced investors that their money would be used to purchase portfolios of delinquent and charged-off debt, which would be flipped and re-sold to other debt buyers for a profit. Instead, the defendants created false purchase agreements, falsified the price on portfolios, and forged signatures from executives at banks and consumer finance companies to make the documents seem more credible.