Men sentenced in NC-based Ponzi scheme spent the loot on jewelry, vacations, feds say
.jpg "Two men were sentenced to prison on Tuesday, Dec. 6, 2022, in connection with a North Carolina-based Ponzi scheme that bilked a total of $4 million from hundreds of unsuspecting investors, U.S. Attorney Dena King said.")
Two men were sentenced to prison Tuesday in connection with a North Carolina-based Ponzi scheme that bilked a total of $4 million from hundreds of unsuspecting investors, U.S. Attorney Dena King said.
Belmont resident Brandon Alexander Teague and Grover resident Austin Delano Page, both 27, spent the loot on pricey clothing, jewelry, travel, luxury-car rentals and entertainment, according to a news release by King’s Charlotte-based office.
The men ”spun false promises and falsified documents to create a fiction of highly lucrative trading, at one point indicating a $16-million balance for a brokerage account that was in fact broke,” King said in the release. The account had a balance of under $7, she said.
U.S. District Judge Frank Whitney sentenced Page to eight years in prison and Teague to four years in prison and ordered them to pay $4.1 million in restitution, prosecutors said
Page duped Teague during the scheme, which is why Teague received half the sentence of Page’s, according to prosecutors. Neither could be reached by The Charlotte Observer Tuesday night.
According to court documents, the men told investors they ran a Kings Mountain hedge fund called D&T Investment Group that invested in various securities, including stock in Apple and other well-known companies.
D&T wasn’t a hedge fund and held no securities licenses or registrations, court records show.
Page and Teague lacked licenses to sell securities, which investors would have learned by calling the N.C. Secretary of State’s Securities Division, Secretary of State Elaine Marshall said Tuesday.
“People placed their faith as well as their funds with Mr. Page and Mr. Teague,” King said. “That trust was repeatedly broken over the course of this scam,” which stretched from October 2020 to December 2021.
How the scheme unfolded
The men pulled off the scheme by having investors sign an investment contract with D&T, among other documents, prosecutors said.
In the fake documents, D&T told investors the company would guarantee 100% of their initial investment, and that the investors would get 70% of the trading profits, court records show.
The supposed “profits” investors got were Ponzi-style payments, where Page and Teague used new investors’ money to make payments to existing investors, prosecutors said.
Victims received bogus monthly statements that showed trading gains that Page falsely reported to Teague, court records show.
When some investors and D&T employees, including Teague, started questioning the legitimacy of D&T’s operations, Page created fake screenshots of various financial accounts that inflated D&T account balances, according to court documents.
Page and Teague spent “a significant portion” of the investors’ money on excessive salaries and other compensation for D&T employees, including Page’s family, records show.
On Dec. 2, 2021, as their scheme collapsed, Page and Teague traveled to Italy while telling D&T employees the company would close, prosecutors said.
Both were arrested on New Year’s Eve at JFK Airport in New York after agreeing to return to the U.S., according to King’s office.
Guilty pleas
On April 20, Page pleaded guilty to wire fraud and Teague to securities fraud. They are free on bond awaiting an order to report to the federal Bureau of Prisons to begin their sentences, prosecutors said.
King vowed to find and prosecute others who try to bilk people through fraudulent investment schemes..
“Working with our law enforcement counterparts, we will continue to investigate and prosecute scoundrels who cheat and lie their way into their investors’ pockets, only to squander away their victims’ money,” she said.
This story was originally published December 7, 2022 at 6:00 AM with the headline "Men sentenced in NC-based Ponzi scheme spent the loot on jewelry, vacations, feds say."