Wilmington Investment Advisor pleads guilty to charges related to $7 million scheme to defraud clients | USAO-EDNC

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RALEIGH, NC – Shawn Edward Good of Wilmington, pleaded guilty today to his role in a $7 million investment fraud scheme. Good pleaded guilty to wire fraud and money laundering and faces up to 360 months in prison.

“We crack down on fraudsters who rip off unwitting investors,” said US attorney Michael Easley. “This investment adviser betrayed the trust of at least a dozen clients, taking more than $7 million – the money he promised would go to low-risk investments – and used it to fill himself pockets, buying real estate, luxury cars and vacations. This decade-long scam has finally come to an end.

“High-yield investment fraud schemes are designed to appeal to people’s hope that ‘you can get something for nothing’, often resulting in the total loss of the investment,” Donald “Trey” said. Eakins, IRS Criminal Investigations Special Agent in charge of the Charlotte Field Office. “Rest assured that the IRS Criminal Investigation, along with our partners at the North Carolina State Bureau of Investigation (SBI) and the U.S. Attorney’s Office, will hold those who engage in similar behavior fully accountable.”

According to court documents and information presented in court, Good was employed as a registered representative and investment adviser for Morgan Stanley Smith Barney, LLC in Wilmington. From 2012 to February 2022, Good ran a scheme to obtain money through an investment fraud, commonly known as a Ponzi scheme. Specifically, Good solicited investments from business clients and others for purported real estate projects and tax-exempt municipal bonds, touting these opportunities as low-risk investments that would yield returns of between 6% and 10%. % over periods of three or six months.

To make these investments, Good has arranged for some clients to obtain a Liquid Asset Line of Credit (LAL) secured by their Morgan Stanley investment or retirement accounts. Good instructed customers to transfer LAL funds to their personal bank accounts and then wire the funds directly to Good’s personal bank account. Other victims paid Good by paper check and wire transfers using funds from sources other than Morgan Stanley accounts.

At least 12 victims invested approximately $7,246,300 based on misrepresentations and misrepresentations made by Good. Instead of investing in land development or bonds, Good used the money for personal expenses, including his Wilmington residence; a condominium in Florida; luxury vehicles including a Mercedes Benz, Porsche Boxster, Tesla Model 3, Alpha Romeo Stelvio and Lexus RX350; gastronomy; and holidays in Paris, France; Cinca Terra, Italy; Jackson, Wyoming; Las Vegas, Nevada; and other destinations. To lend credibility to the Ponzi scheme and evade detection, Good also used some of the investors’ funds to make payments to previous investors.

Michael Easley, United States Attorney for the Eastern District of North Carolina, made the announcement after U.S. Magistrate Judge Robert T. Numbers, Jr. accepted the plea. The Internal Revenue Service’s Criminal Investigations Unit and the North Carolina State Bureau of Investigation’s Financial Crimes Unit are investigating the case, and Assistant U.S. Attorney Toby Lathan is prosecuting the case.

Court documents and related information can be found on the U.S. District Court for the Eastern District of North Carolina website or on PACER by searching for Case #7: 22-CR-00096-D.

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