Babb and Ruth, Wire Fraud, Florida 2014

Two Brevard County men have been sentenced to over 10 years in federal prison for operating a massive $18 million fraud scheme.

Sr. U.S. District Judge John Antoon, II handed down the sentence to Donald Ray Babb (58, Merritt Island) and Ralph Victor Ruth (61, Melbourne) for conspiracy to commit wire fraud.

The Court also ordered the forfeiture of their interest in multiple properties, including 422 Waterside Drive, Merritt Island, FL; 3502 Tipperary Drive, Merritt Island, FL; 3661 Turtle Mound Road, Melbourne, FL; 312 Sycamore Circle, Warne, NC; and 3498 NC Highway 60, Murphy, NC, which were traceable to proceeds of the offense.

The Court entered a money judgment in the amount of $18,731,125.58, the proceeds of the conspiracy, and ordered restitution in the amount of $9,728,968.48.

Babb and Ruth pleaded guilty on November 12, 2014, to orchestrating a scheme that defrauded approximately 181 investors out of $18.7 million.

According to court documents, the duo operated multiple businesses, including Southeast Mutual Insurance and Investment, LLC, Capstar Industries, LLC, and First Merchant Capital, LLC, falsely representing them as licensed financial institutions whose deposits were insured by the FDIC.

They advertised risk-free Certificates of Deposit (CDs) investment opportunities that yielded high rates of return, but never purchased a CD for an investor.

Instead, they used the money to make payments to earlier investors in the scheme, and to purchase real estate and other luxury items for themselves.

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigation, the Florida Office of Financial Regulation, and the Brevard County Sheriff’s Office.

It was prosecuted by Assistant United States Attorney David Haas.

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