Jay B. Ledford, Ponzi Scheme, Maryland 2020

Baltimore, Maryland – In a shocking turn of events, Jay B. Ledford, a 55-year-old certified public accountant, has been sentenced to 14 years in federal prison for masterminding a $396 million Ponzi scheme that left countless victims financially devastated.

According to court documents, Ledford and his co-conspirator, Kevin B. Merrill, operated the scheme from 2013 through September 2018, with an additional $260 million in attempted investments at the time of Ledford’s arrest. The scheme, which involved the sale of defaulted consumer debts, duped investors into handing over millions of dollars.

“Jay Ledford created phony documents and operated a debt collection center to provide credibility to Kevin Merrill’s false claims to investors, duping them into paying millions of dollars into this Ponzi scheme,” said U.S. Attorney Robert K. Hur. “The effects of this kind of fraud can be devastating and a number of victims have lost their life savings. This sentence sends a strong message that law enforcement will root out, prosecute, and send to prison criminal fraudsters like Jay Ledford and his co-conspirators.”

As part of the scheme, Ledford provided fictitious sales agreements and other documents, including false tax returns, to Merrill, who used them to induce individuals to invest with his companies, Delmarva Capital and Global Credit Recovery. The conspirators falsely represented to investors that they would use the investors’ money to buy consumer debt portfolios and make money for them by collecting the payments that people made on their debts or selling the portfolios for a profit to other third-party debt buyers.

“Consumer debt portfolios” are defaulted consumer debts to banks/credit card issuers, student loan lenders, and car/truck financers that are sold in batches called “portfolios” to third parties that attempt to collect on the debts. Ledford and Merrill both had businesses that collected on consumer debt or purchased consumer debt.

As a result of the scheme, Judge Richard D. Bennett ordered Ledford to pay restitution in the full amount of the victims’ losses, which is at least $189,166,116. Judge Bennett will also enter an order of forfeiture, with the exact amount of forfeiture still to be determined. This sentence sends a strong message that law enforcement will root out, prosecute, and send to prison criminal fraudsters like Jay Ledford and his co-conspirators.

The U.S. Securities and Exchange Commission (SEC) has a pending parallel civil action in this matter. The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Robert W. Manchak of the Federal Housing Finance Agency, Office of Inspector General.

In related news, Kevin B. Merrill, Ledford’s co-conspirator, was sentenced to 22 years in federal prison on October 10, 2019, for his role in the scheme.

DEFENDANT INFORMATION:

Defendant: Jay B. Ledford

Criminal Charges: Conspiracy to commit wire fraud, aggravated identity theft, and a money-laundering transaction

City and State: Baltimore, Maryland

Date: October 10, 2019 (Sentencing Date)

Sentence: 14 years in federal prison, followed by three years of supervised release

Restitution: At least $189,166,116

Forfeiture: Exact amount still to be determined

Source: https://www.justice.gov/usao-md/pr/fraudster-who-created-false-documents-facilitate-396-million-ponzi-scheme-sentenced-14