News

Former Ellicott City Man Indicted in $17 Million Online Ponzi Scheme


Allegedly Used Fraud Proceeds to Purchase Numerous Luxury Vehicles

FOR IMMEDIATE RELEASE
June 3, 2009

Baltimore, Maryland - A federal grand jury indicted Byron Keith Brown, age 32, of Vienna, Virginia, formerly of Ellicott City, Maryland, today in a five year scheme to fraudulently obtain over $17 million from online investors, announced United States Attorney for the District of Maryland Rod J. Rosenstein.

“The indictment alleges that Byron Brown used the internet to make it appear as if he was running an investment management business for wealthy investors, when in fact he was stealing millions of dollars from investors and using it to buy a fleet of luxury cars,” said U.S. Attorney Rod J. Rosenstein. “In addition to sentencing criminals to prison, our goal is to seize any assets purchased with criminal proceeds.”

According to the 10 count indictment, Brown was the chief executive officer for companies called In God We Trust (IGT) Financial Services, IGT Investment Company, IGT Wealth Management Group, and WM Private Equity Fund, Inc. Brown was not licensed as a broker, dealer or investment advisor in Maryland, Virginia or the District of Columbia.

The indictment alleges that from 2003 to 2009, Brown operated websites in which he falsely: held himself out as having 10 years experience in financial services and securities industries when in fact he had filed personal bankruptcy in 1999; and claimed to have offices in Washington, D.C., Wilmington, Delaware, New York, NY, and London, England, when in fact he had rented a mailbox or services at a virtual office that provided telephone answering services and mail forwarding services to clients. Brown allegedly advertised on his websites that the basic investment required was a minimum of $1 million. He used computer software to create an illusion that the investor was logging into a banking website and viewing account information when in fact, the account numbers were made up. Brown found investors through his websites and referrals.

The indictment further alleges that Brown had opened some bank accounts in the names of investors, but Brown retained a power of attorney over the accounts, managed all the money that was invested, controlled investment decisions and deprived investors of information about their accounts. At times, Brown allegedly used funds from new investors to make payments to old investors and to conceal his diversion of investors’ monies.

Brown is alleged to have used the investors’ money to purchase a 2004 Bentley, a 2005 Rolls Royce Phantom, a 1936 Auburn Speedster, a 2007 BMW, a 1997 Jaguar and a 2006 Aston Martin.

The indictment seeks forfeiture of $17 million, the amount Brown is alleged to have caused investors to invest in his companies. To date, the government has seized 16 vehicles, including some of the vehicles described above, as well as a 2007 Lamborghini, a 2008 Maserati, two Mercedes and a 2002 Ferrari.

Brown faces a maximum sentence of 20 years in prison and a $250,000 fine for each of the five counts of wire fraud; and 10 years in prison and a fine of twice the amount laundered for each of the five counts of money laundering. Brown had his initial appearance in federal district court in Baltimore today and was detained pending a detention hearing on Monday, June 15 at 2:30 p.m.

An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

United States Attorney Rod J. Rosenstein thanked the Internal Revenue Service, Criminal Investigation for its investigative work and commended Assistant United States Attorney Joyce McDonald, who is prosecuting the case.

 

 

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