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DECEMBER 5, 2008





            JEFFERSON CITY, Mo. – John F. Wood, United States Attorney for the Western District of Missouri, announced that a Columbia, Mo., businessman was convicted by a federal jury today for his role in a multi-million dollar investment fraud, as well as for participating in a money-laundering conspiracy.


            Daryl Miles Brown, 31, who was chairman of The Vertical Group, located in Columbia, and principal of Cerberus, Inc., located in Fulton, Mo., was found guilty of the charges contained in an Aug. 11, 2006, superseding indictment.

            Brown devised a business scheme to solicit victims to invest in what he claimed were opportunities to purchase high-yield, short-term investments that were unavailable to the general public. Brown referred to these investment opportunities as “Stand By Letters of Credit” or “SBLCs.” More than $2 million was invested in the nonexistent securities by victims of the fraud scheme.

            During the scheme, which ran from December 2004 to September 2005, Brown falsely claimed to be licensed by the SEC and/or the National Association of Securities Dealers. Brown also made false statements regarding the investments he was offering his victims, telling victims that in return for their investment (typically $50,000 or more) they would receive a profit of generally about 20 percent within 30 business days. Brown claimed that victims who remained invested after 30 days would stand to see a return of up to approximately 20 percent of their initial investment each week. Brown claimed that the investment was safe and that investors’ money could not be lost.  

            In addition to these false statements regarding the investments, Brown also falsely claimed that he had a business degree from the University of Missouri, that he played professional football with the Kansas City Chiefs, that he had several highly-placed business relationships and that he was involved in a multi-million dollar trust.

            In carrying out his scheme, Brown gave his victims instructions to wire funds to bank accounts in Florida and elsewhere. Brown used the investor money for his own personal use, including such things as providing money to a girlfriend, entertainment and hotel rooms for Brown and his girlfriend, and renting automobiles and chauffeur-driven limousines.

            Following the presentation of evidence, the jury in U.S. District Court in Jefferson City deliberated about five hours over two days before returning the guilty verdicts to U.S. District Judge Nanette K. Laughrey, ending a trial that began Monday, Dec. 1, 2008.

            Brown was convicted of participating in a conspiracy to defraud investors and seven counts of wire fraud related to the conspiracy. Brown was also convicted of participating in a conspiracy to commit money laundering and three counts of conducting money transactions in criminally-derived property, as well as two counts of causing a person to travel across state lines as part of the investment scheme.

            The jury also returned a guilty verdict on the forfeiture allegation, which requires Brown to forfeit to the government $2 million, which represents the proceeds of the investment scheme.

            On March 28, 2007, co-defendant Sylvester L. Mitchell III, 38, of Columbia, pleaded guilty to his role in the investment scheme. Mitchell was an employee of The Vertical Group and presented himself as the Chief Financial Officer of Cerberus. On Sept. 22, 2006, co-defendant Dennis Cole, 59, of Clearwater, Fla., also pled guilty to his role in the conspiracy in a separate but related case.

            A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.


            The case is being prosecuted by Assistant U.S. Attorneys Anthony P. Gonzalez and Lawrence E. Miller. It was investigated by the Federal Bureau of Investigation, the Missouri Attorney General’s Office and the Missouri Secretary of State’s Securities Section.


This news release, as well as additional information about the office of the United States Attorney for the Western District of Missouri, is available on-line at