Joshua Ray Abernathy, Mail Fraud and Unlawful Money Transactions, Virginia 2015

Chesapeake Man Sentenced to 7 ½ Years in Prison for $1.1 Million Ponzi Scheme

NORFOLK, Va. – Joshua Ray Abernathy, 37, of Chesapeake, was sentenced today to 90 months in prison, followed by 3 years of supervised release for mail fraud and unlawful money transactions. The Court also ordered Abernathy to pay $1,181,755.08 in restitution to his victims and to forfeit all of the proceeds from his offense.

Abernathy pleaded guilty on March 13, 2015. According to court documents, Abernathy, a licensed broker and financial advisory, engaged in a six-year Ponzi scheme. Abernathy convinced his clients to transfer funds from legitimate IRA accounts to his company “Omega Investment Group.” Abernathy claimed that he could invest the funds in “puts” and “calls” and reap fantastic returns.

However, in reality, Abernathy invested only a tiny portion of the money in his personal E*Trade account and used the majority of the monies to fund his extravagant lifestyle. Abernathy spent money on living expenses, home furnishings, restaurants, sporting goods, electronics, clothing and entertainment. He also spent substantial investor funds for traveling, including cruises, ski trips, vacations to Texas, Florida, Mexico, New York, and a three-month tour of England.

Abernathy’s lavish lifestyle also included $250,000 spent on renting luxury automobiles, including a bright orange Lamborghini. After spending all of the client funds and with investors asking questions, Abernathy walked into the FBI and confessed to running the Ponzi scheme.

U.S. Attorney Dana J. Boente, U.S. Postal Inspector David M. McGinnis, IRS-Criminal Investigation Special Agent Thomas Jankowski, and FBI’s Norfolk Field Office Special Agent John S. Adams made the announcement after sentencing by U.S. District Judge Mark S. Davis.

The case was investigated by the Tidewater Complex Financial Crimes Task Force, which includes the U.S. Postal Inspection Service, the IRS Criminal Investigations Divisions, and the FBI’s Norfolk Field Office. Assistant U.S. Attorney Melissa O’Boyle is prosecuting the case.

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