FOR IMMEDIATE RELEASE:
WEDNESDAY - July 21, 2010
DAY-TRADER PLEADS GUILTY TO MAIL FRAUD
RALEIGH - United States Attorney George E.B. Holding announced that in federal court yesterday RONNIE D. RAINEY, 43, presently of Elk City, Oklahoma, pleaded guilty before United States District Judge James C. Dever, III, to mail fraud, in violation of Title 18, United States Code, Section 1341.
According to the one-count revised Information filed today, RAINEY devised a scheme to defraud members of the public out of money and property through investment funds. Doing business as Par 5 Investors, LLC; Birdie Investors, LLC; Eagle Investors, LLC; and Double Eagle Investors, LLC; RAINEY created multiple accounts with both Ameritrade and E*Trade and began to solicit investors to deposit money in those funds, which were not properly registered as securities. In soliciting members of the public to invest in these funds, RAINEY, who was never registered as a broker, informed potential investors that they would earn a monthly average of 10% growth on their investment through his day-trading. RAINEY also informed several investors early in the scheme that their money would be placed in an escrow account and that he guaranteed no loss to the principal. Relying on these representations, members of the public invested with RAINEY, including several investors who directed that their IRAs be invested in Par 5 and related funds.
RAINEY would send monthly investment statements to investors. When the funds started to decline in value, RAINEY falsely told investors, through these statements, that their investments were doing well.
At sentencing, set for the November 1, 2010 term of court, RAINEY faces up to 20 years’ imprisonment followed by up to three years’ supervised release and a fine of up to 250,000 or not more than the greater of twice the gross gain or twice the gross loss from the offense.
The investigation of this case was conducted by the Office of the North Carolina Secretary of State. Assistant United States Attorney Jason Cowley represented the government.
News releases are available on the U. S. Attorney’s web page at www.usdoj.gov/usao/nce within 48 hours of release.