William J. Ferry, Investment Fraud, Washington 2023

Washington – Two California investment advisors, William J. Ferry and Dennis J. Clinton, have been found guilty of their roles in a $1 billion high-yield investment fraud scheme. The scheme targeted a wealthy investor, who was actually an undercover FBI agent.

“Mr. Ferry and Mr. Clinton tried to dupe undercover agents into believing their high-yield investment program would earn them extremely high rates of return,” said Assistant Attorney General Lanny A. Breuer. “In fact, Ferry and Clinton were conspiring to steal their money, along with the money of trusting investors. Undercover operations are an integral part of our efforts to stop financial fraudsters before they wipe out the life savings of innocent victims. Based on today’s verdict, the defendants will now pay a heavy price for their conduct.”

Ferry, 70, of Newport Beach, Calif., and Clinton, 64, of San Diego, were each found guilty in U.S. District Court for the Central District of California of one count of conspiracy, two counts of mail fraud, and six counts of wire fraud. They face a maximum penalty of 20 years in prison on each fraud count. They will be sentenced on Feb. 1, 2013.

Paul R. Martin, a former senior vice president and managing director of Bankers Trust, was also found guilty in a separate trial on Aug. 3, 2012, for his role in the scheme. Martin, 63, of New Jersey, was convicted of one count of conspiracy, two counts of mail fraud, and six counts of wire fraud. At sentencing, scheduled for Feb. 1, 2013, Martin faces a maximum penalty of 20 years in prison on each fraud count.

The scheme involved the defendants promoting a high-yield investment fraud program promising an extremely high return at little or no risk to principal. Investors were told that they would be registered in Washington, D.C., with the Federal Reserve Bank and that their offshore bank account would be managed by a Swiss banker who was already managing billions of dollars for the defendants.

Evidence at trial established that the defendants conspired to promote the high-yield investment program from February to December 2006. The defendants falsely represented to FBI undercover agents that they would arrange for them to meet a Federal Reserve official and/or the chairman of the board of a major U.S. bank to confirm the existence of the defendants’ high-yield investment program.

The indictment was returned on Aug. 21, 2008, against Ferry, Clinton, Martin, John Brent Leiske, Alex Chelak, Richard Arthur Pundt, Brad Keith Lee, and Ronald J. Nolte. The defendants will now face the consequences of their actions and the victims of their scheme can begin to heal and rebuild.

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