A classic stupid Ponzi scheme! It has been said that a sucker is born every day, but I still find myself amazed that otherwise intelligent people would fall for something so blatantly stupid as what Blackwell offered to the fine folks in and around Colleyville, Texas. As a business ethics and fraud prevention speaker and author, I know first hand about what goes on behind the scenes when such a fraud occurs and how folks fall prey to victimization by perpetrators like Blackwell.
Christopher Blackwell, 32, of Colleyville, Texas, has been indicted by a federal grand jury on two counts of wire fraud in relation to an investment fraud scheme he has operated since January 2007. Blackwell was arrested in Phoenix, Arizona, earlier this month. Blackwell remains in custody. A date has not yet been set for his arraignment in U.S. District Court in Fort Worth.
According to the indictment, Blackwell allegedly deceived investors by falsely telling them that he would invest their money in business ventures that would generate a high rate of return, and by fraudulently assuring them that the investments would involve little to no risk. He told investors that their money would be invested in specific business ventures, but when he received investors’ money, he didn’t invest it and instead used most of it for his own personal benefit. On occasion, he would use some of the funds from new investors to make small payments to earlier investors to convince them that their money was generating a profit. However, not all investors received payments from Blackwell and many lost all of the money they invested.
According to the criminal complaint filed in the case, more than 20 victims, suffering more than $4 million in losses as a result of Blackwell’s scheme, have been identified. One investor, identified only by initials, lost all of the $325,000 he gave Blackwell to invest. In fact, after this investor wired the money as directed to Blackwell’s accounts, agents obtained Blackwell’s bank records and were able to determine that Blackwell didn’t invest the money as promised, but instead used it for personal expenditures including automatic teller machine withdrawals, dining and entertainment, luxury vehicle expenses and payments to family and business associates.
In February 2011, the U.S. Securities and Exchange Commission (SEC) filed a complaint against Christopher Love Blackwell, AV Bar Reg, Inc. and Millers A Game, LLC, two entities he controls, claiming that Blackwell enticed investors by telling them that his trading program would generate highly impressive, guaranteed returns of 25 to 30 percent per month with regularity. He falsely claimed these profits were possible because of his academic pedigree, including Master’s and Ph.D. degrees acquired at a prestigious university in Spain (Blackwell holds no such degrees); his extensive experience as a trader (he has little, if any, such experience); and the know-how and connections he acquired while employed by Goldman Sachs and The Bank of Madrid (he never worked at either firm). In March 2011, the SEC and Blackwell and his entities entered into an agreed judgment.
25 to 30 percent per month with regularity? Really, in this economy people would believe that? Whatever happened to due diligence?
An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, each of the wire fraud counts carries a maximum statutory sentence of 20 years in prison and a $250,000 fine. Restitution could be ordered.
If you were a victim of this Ponzi Scheme…perhaps you’d comment on the lure Blackwell used to secure your investment.
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