RALEIGH, N.C. – The Floyd brothers have been sentenced for their role in a $20 million Ponzi scheme that left dozens of investors in Eastern North Carolina’s Eastern District with nothing but heartache. Joseph W. Floyd, IV and William F. Floyd, Jr., both from Whiteville, pleaded guilty to conspiracy to sell unregistered securities before U.S. District Judge Terrence W. Boyle.
These brothers allegedly used their family insurance business to dupe unsuspecting victims into investing in a fraudulent investment program. They promised low-risk investments with high returns, but behind the scenes, they were operating a Ponzi scheme. At sentencing, each Floyd faces up to 60 months in federal prison, a $250,000 fine, and three years of supervised release.
“The Floyd brothers used their family insurance business to fleece dozens of Eastern North Carolina families of millions,” U.S. Attorney Michael Easley said. “The U.S. Attorney’s Office is turning up the heat on white-collar conmen who use Ponzi schemes to defraud hardworking North Carolina families.”
According to court documents, Floyd’s Insurance Agency (FIA) offered a ‘loan program’ that promised interest rates ranging from six percent to 10 percent, far exceeding those of traditional money market accounts or certificates of deposit. The Floyds claimed FIA was earning profits to cover these returns and principal redemptions, but they never registered their investment offering with the SEC as required by law.
By 2012, FIA had amassed over $20 million in debt without any legitimate means to service it. To avoid bankruptcy, the Floyd brothers continued the Ponzi scheme, paying off existing investors with funds from new ones, while hiding FIA’s insolvency. The agency filed for Chapter 11 bankruptcy protection in May 2020, and the Floyds followed suit in August 2020.
Michael Easley announced the convictions after the arraignments concluded. The FBI Charlotte Field Office and the SEC Atlanta Field Office investigated the case, with Assistant U.S. Attorney Adam F. Hulbig leading the prosecution for the government.
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Key Facts
- State: North Carolina
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes|White Collar Crime
- Source: Official Source ↗
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