A Florida investment scheme involving as much as $320 million and thousands of investors has led to multiple convictions and court orders to pay restitution.
1 Global Capital
Based in Hallandale Beach, Florida, 1 Global Capital was founded and operated by several key individuals, including CEO Carl Ruderman, COO Steven Allen Schwartz, CFO Alan Heide, and attorneys Andrew Ledbetter and Jan Douglas Atlas. Each of these individuals were charged with various counts of wire fraud and security fraud.
According to the company’s website, 1 Global Capital was in the business of providing pay day loans to businesses of all types to fund various inventory, equipment, and other similar business needs. These loans were given to businesses with poor credit, which allowed 1 Global Capital to hike up interest rates on the loans. Investors would provide funds to the company in exchange for the right to collect these high interest rates from businesses.
However, individuals involved with the company reportedly solicited illegal investments in the company. Court documents show that attorneys Ledbetter and Atlas wrote letters falsely claiming that an investment in 1 Global Capital would not be considered a security. Various individuals used these letters to solicit money from investors, including the founders, executives, and even several financial advisors. Individuals who successfully pitched the investment opportunity to clients were rewarded with seven-figure commissions.
Convictions and Restitution
According to the Department of Justice, three individuals pleaded guilty and were sentenced this week. Former COO Schwartz was given 24 months in prison and must pay restitution totaling over $36 million. Former CFO Heide previously pleaded guilty in early 2020 and received a five-year sentence for his actions. He was also ordered to pay over $57 million for his actions in the scheme.
Ledbetter, an attorney working with the company, was given five years in prison and ordered to pay almost $150 million in restitution. Atlas, another attorney, was given eight months in prison and ordered to pay nearly $30 million in restitution. Additionally, some financial advisors who solicited investments from their clients were also charged and ordered to pay restitution.
Takeaways
High commissions are enticing for individuals involved in these types of schemes. In this case, there were several individuals who made millions of dollars each by soliciting investors.
Before deciding to invest in a particular product or business, it is crucial to obtain unbiased information on the investment offering. Although this may have been a predatory, high-pressure sales pitch, there are still ways to verify the opportunity with outside consultants and attorneys. Do not let salespeople pressure you into making a quick decision without completing further research on your part.
About Vernon Litigation Group
Contact the financial attorneys at Vernon Litigation Group today to discuss your options when faced with a major investment opportunity. If you have been victimized by this scheme or any other apparent investment scheme, please call us at 239-319-4434 for a confidential, no-cost consultation.
Vernon Litigation Group represents investors throughout the United States and abroad in various financial disputes, including breach of fiduciary duty, investment fraud, Ponzi schemes, securities litigation, FINRA arbitration, and more.