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Defendant Babb and Co. Plead Guilty to $18M Wire Fraud Scheme
Orlando, FL – In a shocking turn of events, two Brevard County residents, Donald Ray Babb (58, Merritt Island) and Ralph Victor Ruth (61, Melbourne), have pleaded guilty to an Information charging them with conspiracy to commit wire fraud.
According to court documents, Babb and Ruth orchestrated a scheme that defrauded approximately 181 investors out of $18,731,125.58 between June 2006 and December 2013.
The duo, doing business as Southeast Mutual Insurance and Investment, LLC, Capstar Industries, LLC, and First Merchant Capital, LLC, falsely represented their businesses as licensed financial institutions whose deposits were insured by the FDIC.
Using these entities, they advertised risk-free Certificates of Deposit (CD) investment opportunities that yielded high rates of return. However, neither Babb nor Ruth ever 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 Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigation, the Florida Office of Financial Regulation, and the Brevard County Sheriff’s Office.
Assistant United States Attorney David Haas is prosecuting the case.
Babb and Ruth each face a maximum penalty of 20 years in federal prison. A sentencing date has not yet been set.
Key Facts
- State: Florida
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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