U.S. Marshals arrested two Macon residents in Colorado on Tuesday for their involvement in a Ponzi scheme which took in over $2 million.
The Macon Telegraph has the story.
Federal authorities have charged both Gary Hutcheson and Saundra McKinney Pyles with five counts of mail fraud and five counts of money laundering in connection with the Ponzi scheme. Generally, each of these charges may carry with it a sentence of up to 20 years.
Authorities believe that between May 2006 and July 2008 the two devised a scheme to defraud individual investors and groups of investors. Hutcheson allegedly created a company called Georgia Ionics Fund and used two securities brokers named CyberTrade Inc. and Cobra Trading to carry out the scheme. Hutcheson is believed to have attracted investors by asking them to place funds in what he called a hedge fund. He also claimed to have expertise in making investments by lauding his past success when in fact he had never succeeded in investing.
The government claims that Hutcheson deposited more than $2.1 million into bank accounts which he received from investors. Of this, he invested only $780,000 and lost the majority of it. In order to convince investors that the fund was successful, Hutcheson paid out $457,000 to certain investors claiming that the money was profit. In fact, the money was simply a return of the investor’s own money or money which was acquired from new investors. In the end, authorities believe he kept more than $1.3 million for himself.
Even though Hutcheson and Pyles did not make any profits, the government claims that they falsely represented that profits were being made and that the fund was successful. The two now await extradition proceedings from Colorado to Georgia.
Pate & Brody is an accomplished Georgia law firm with offices in Atlanta, Macon and Madison. Our lawyers are dedicated to pursuing justice for people charged with serious crimes. We have successfully represented clients facing serious federal criminal charges and state criminal charges in courts across Georgia. Our lawyers have been recognized on the list of Georgia’s “Super Lawyers”, and included among Georgia’s “Legal Elite” by Georgia Trend Magazine. Page Pate was recently the Chairman of the Criminal Law Section of the Atlanta Bar Association.
