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Floyd Brothers Admit to $20M Ponzi Scheme
RALEIGH, N.C. – Greed and deception landed brothers Joseph W. Floyd, IV, and William F. Floyd, Jr., in federal court yesterday, as both pleaded guilty to conspiracy to sell and deliver unregistered securities. The pair orchestrated a multi-year, multi-million dollar Ponzi scheme disguised as a legitimate investment program, preying on families across Eastern North Carolina. Each Floyd now faces a statutory maximum of 60 months’ imprisonment, a $250,000 fine, and three years of supervised release, alongside mandated restitution to their victims.
U.S. Attorney Michael Easley didn’t mince words, stating, “The Floyd brothers used their family insurance business to fleece dozens of Eastern North Carolina families of millions by promising low-risk investments with outsized returns.” Easley’s office is cracking down on white-collar criminals who exploit hardworking citizens through schemes like this. The Floyds, operating out of Whiteville, North Carolina, built their fraudulent empire on broken trust and empty promises.
Acting FBI Special Agent in Charge Michael C. Scherck condemned the brothers’ actions, highlighting the personal betrayal involved. “The level of greed the Floyd brothers exhibited is difficult to comprehend. Not only did they prey on members of their own community for profit, even relatives were also not off limits,” Scherck said. “While their guilty pleas won’t reimburse those who lost money, we hope federal prison sentences will repay their victims in some way.”
Court documents reveal the Floyds owned and operated Floyd’s Insurance Agency (FIA), using it as a front for their illegal “loan program.” Over 150 individuals and businesses invested funds, lured by the promise of interest-bearing promissory notes – unregistered securities requiring SEC registration. The Floyds bypassed this crucial legal requirement, shielding investors from vital financial information. They advertised a safe, conservative investment, akin to a money market account or CD, but with inflated interest rates ranging from six to ten percent, guaranteed by the Floyds themselves.
Initially, funds were channeled to Monthly Payment Plan (MPP), a company the Floyds co-owned in Chapel Hill, financing insurance premiums. But by 2012, FIA had amassed over $20 million in investor funds with no legitimate means of repayment. Rather than admit failure, the Floyds transitioned to a classic Ponzi scheme, using new investor money to pay off existing ones, all while concealing their insolvency. The scheme continued for years, culminating in FIA filing for Chapter 11 bankruptcy in May 2020, followed by personal bankruptcy filings for both Floyds in August 2020. Investors were left holding worthless paper.
The case was investigated by the Federal Bureau of Investigation, Charlotte Field Office, with assistance from the Securities Exchange Commission, Atlanta Field Office. Assistant U.S. Attorney Adam F. Hulbig is prosecuting the case. The Department of Justice, Eastern District of North Carolina, led by U.S. Attorney Michael Easley, vows to continue pursuing those who exploit financial systems for personal gain. This case serves as a stark warning: the illusion of easy profit often masks a dangerous reality.
Key Facts
- State: North Carolina
- Agency: DOJ USAO
- Category: White Collar Crime
- Source: Official Source ↗
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