Wednesday, February 21, 2024

He ran an investment firm in Virginia Beach, but feds say he bilked millions from clients, some elderly

A Chesterfield man who owned and operated an investment firm in Virginia Beach pleaded guilty Tuesday to mail fraud and engaging in monetary transactions in criminally derived property.

Edward Lee Moody, Jr., 47, faces 20 years in prison on the mail fraud charge and 10 years for engaging in monetary transactions in criminally derived property.

He is set to be sentenced Feb. 5. He pleaded guilty in federal court in Norfolk.

According to court documents, Moody was a registered investment adviser and the sole owner and operator of CM Capital Management LLC, an investment firm with its principal office located in Virginia Beach.

Moody solicited investors on the basis of his representation that “he would profitably invest their assets in securities on their behalf and manage those investments on an ongoing basis,” federal prosecutors said.

In reality, prosecutors said he ran a Ponzi scheme over a 13-year period, during which he solicited and collected approximately $6.1 million from 53 investors, at least 13 of whom were elderly who liquidated assets from their existing, legitimate retirement accounts in order to provide funds to him that they expected he would invest on their behalf.

In most instances, Moody did not manage the accounts of the investors or buy or sell securities on their behalf, and did not even open individual brokerage accounts for them.

Instead, Moody “diverted investor monies for his personal benefit and to enrich himself, using at least $1.4 million for business expenses, to purchase a home, make car loan payments, shop, travel to Las Vegas and other destinations,” prosecutors said.

He also used approximately $885,000 of investor money to buy and sell securities on his own behalf.

Moody perpetuated the scheme by using approximately $1.5 million that he received from new investors to make periodic lulling payments to earlier investors, and he provided investors with fake monthly account statements that falsely indicated that the investors’ funds had been invested in securities and had earned returns, according to court documents.

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