Matthew James Addy, Securities Fraud, Virginia 2013

Alexandria, VA – In a shocking turn of events, Matthew James Addy, a 34-year-old jeweler from Lancaster, Pennsylvania, pleaded guilty to securities fraud charges for running a brazen $3 million Ponzi scheme.

According to court records, Addy, who owned Edward J. & Company and operated a retail jewelry store called La Porte Jewelers, began recruiting individuals to invest in promissory notes in 2010, claiming they were linked to transactions involving wholesale jewelry and loose precious stones.

However, the investment scheme was a complete fraud, with Addy never conducting any of the contemplated wholesale jewelry transactions. Instead, he used the vast majority of the invested funds on unrelated business and personal expenses.

Addy ultimately recruited more than 40 investors from throughout the United States and Europe, and obtained more than $3 million in invested funds. He even used his affiliations with religious groups to gain their trust, recruiting many of the victim investors from within these organizations.

As part of the scheme, Addy paid back approximately $670,000 to investors during the course of the fraud, claiming it was as supposed profits on their investments. However, much of these payouts came directly from funds contributed by new investors, a classic characteristic of a Ponzi scheme.

Addy faces a maximum penalty of 20 years in prison when he is sentenced on May 10, 2013. The FBI’s Washington Field Office investigated the case, and Assistant United States Attorney Paul J. Nathanson is prosecuting the case on behalf of the United States.

The case serves as a stark reminder of the dangers of Ponzi schemes and the importance of due diligence when investing. It also highlights the need for law enforcement to remain vigilant in rooting out these types of crimes.

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