Case Study:
SEC vs. Kevin Merrill, Jay Ledford, et al
Multi-State $400 Million Fraud Ranked as Top Twenty Ponzi Scheme in U.S. History
The principals behind the fraud, using approximately 40 different entities, obtained approximately $400 million in investments through a pattern of misdirection and outright fabrication regarding the nature and existence of the alleged underlying investment assets.
The Solution
The Securities and Exchange Commission filed a civil lawsuit seeking the appointment of a receiver in the Federal District Court of Maryland, under seal, along with a companion criminal indictment in the same jurisdiction brought by the U.S. Attorney’s Office.
Harney's Greg Milligan was appointed as the Federal Court Receiver in Maryland.
Operated three (3) separate businesses, including the administration of a $6B portfolio of consumer debt, until each business could be liquidated for maximum value.
Sold tens of millions of dollars of real estate, exotic cars, a yacht, jewelry and other luxury goods located across the country.
Successfully resolved clawback claims to obtain false “profits” from net winners of the Ponzi scheme.
The Results
This matter is still pending; however, Milligan has already issued an interim distribution such that all investors have now received at least a 50% return on each investors’ allowed claim amount.
All three individual defendants were charged criminally, pleaded guilty to federal charges, and the primary actors were sentenced to 22 years (Merrill) and 14 years (Ledford) in prison.
Services & Roles
Fiduciary Services
Federal Court Receiver
Interim Management
Strategic Planning
Financial Advisory
Visibility Analysis
Forensic Accounting
Fraud Investigation
Liquidation/Wind Down
*Some engagements may have been performed by team prior to joining Harney Partners.
