Front Man Pleads Guilty to $550 Million Ponzi Scheme--One of the Largest Ever Charged in Maryland
Baltimore, Maryland – Kevin B. Merrill, age 53, of Towson, Maryland, pleaded guilty today to conspiracy and wire fraud arising from a $550 million investment fraud scheme that operated from 2013 through September 2018. Co-defendant Cameron R. Jezierski, age 28, of Fort Worth, Texas, previously pleaded guilty to his role in the scheme. The U.S. Securities and Exchange Commission (SEC) has filed a parallel civil complaint in this matter.
The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Acting Special Agent in Charge Jennifer L. Moore of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Robert W. Manchak of the Federal Housing Finance Agency, Office of Inspector General.
“Federal prosecutors, FBI agents, and our SEC partners together interrupted an ongoing fraud scheme, with the potential to victimize even more people. Kevin Merrill lured investors through an elaborate web of lies, duping them into paying millions of dollars into this Ponzi scheme,” said U.S. Attorney Robert K. Hur. “The effects of this kind of fraud can be devastating. As a result of this scheme, a number of victims have lost their life savings.”
According to his plea agreement, beginning in January 2013, Merrill and his co-conspirators perpetrated a Ponzi scheme to defraud investors of more than $394 million. Specifically, Merrill and a co-conspirator invited investors to join them in purchasing consumer debt portfolios. “Consumer debt portfolios” are defaulted consumer debts to banks/credit card issuers, student loan lenders, and car/truck financers which are sold in batches called “portfolios” to third parties that attempt to collect on the debts. Merrill, using the names of collection businesses he owned, including Delmarva Capital and Global Credit Recovery, among others, falsely represented to investors that he would use the investors’ money to buy consumer debt portfolios and make money for them by (1) collecting the payments that people made on their debts or (2) selling the portfolios for a profit to other third-party debt buyers, in a practice called “flipping.” According to the related complaint in the civil action filed by the SEC, the victim investors included small business owners, restauranteurs, construction contractors, retirees, doctors, lawyers, accountants, bankers, talent agents, professional athletes, and financial advisors, located in Maryland, Washington, D.C., Northern Virginia, Denver, Texas, Chicago, New York, and elsewhere. As detailed in the plea agreement, Merrill admitted that the scheme caused financial hardship to at least five victims, and Merrill knew that at least one of those was a vulnerable victim.
Read more: https://www.justice.gov/usao-md/pr/front-man-pleads-guilty-550-million-ponzi-scheme-one-largest-ever-charged-maryland
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