Former Morgan Stanley Financial Advisor Sentenced to Over 7 Years in Prison for Executing a Multimillion Dollar Ponzi Scheme
For Immediate Release
U.S. Attorney's Office, Eastern District of North Carolina
“This investment advisor was a financial predator who used his position of trust to run a decade-long Ponzi scheme that took in more than $7 million from over a dozen clients,” said U.S. Attorney Michael Easley. “Shawn Good robbed the savings and retirements of clients who trusted him – including a widow, a single mom, and a retired police officer. He did it out of pure greed, to fuel his lavish lifestyle – purchasing luxury cars, exotic vacations and real estate. His scheme has finally come to an end thanks to the unshakable courage of the victims and the hard work of law enforcement at the IRS and the SBI. Faced with a choice between right and wrong, Mr. Good chose wrong. Now he will spend the next seven-plus years in federal prison.”
“The IRS uses all its investigative tools to uncover abusive tax schemes that misappropriate client funds for personal gain by advisors and brokers,” said Donald “Trey” Eakins, IRS Criminal Investigation, Charlotte Field Office. “Investment schemes that seem too good to be true should be a signal to investors to stay clear. The IRS is actively pursuing promoters as well as investors who knowingly participate in these types of tax avoidance schemes."
“The SBI’s Financial Crimes Unit is proud to have joined the efforts in this investigation to help bring about closure and justice to the victims. As for the individuals who intentionally target vulnerable populations in their fraudulent schemes, they should anticipate we will always pursue justice vigorously on behalf of those we serve and protect” said North Carolina State Bureau of Investigation Director Robert Schurmeier.
According to court documents and information presented in court, Good was employed as a registered representative and investment advisor for Morgan Stanley Smith Barney, LLC in Wilmington. From 2012 to February 2022, Good executed a scheme to obtain money through an investment fraud commonly known as a Ponzi scheme. Specifically, Good solicited investments from business clients and others for purported real estate projects and tax-free municipal bonds, touting these opportunities as low-risk investments that would pay returns of between 6% and 10% over three- or six-month terms.
To effectuate these investments, Good caused some clients to obtain a liquid asset line of credit (LAL) secured by their Morgan Stanley investment or retirement accounts. Good directed clients to transfer the LAL funds to their personal bank accounts and then wire the funds directly to Good’s own personal bank account. Other victims paid Good by paper check and wire transfers using funds derived from sources other than Morgan Stanley accounts.
At least 12 victims invested approximately $7,246,300 based on false statements and misrepresentations made by Good. Instead of investing in land development or bonds, Good used the money for personal expenditures including his Wilmington residence; a condominium in Florida; luxury vehicles including a Mercedes Benz, a Porsche Boxster, a Tesla Model 3, an Alpha Romeo Stelvio, and a Lexus RX350; fine dining; and vacations to Paris, France; Cinca Terra, Italy; Jackson, Wyoming; Las Vegas, Nevada; and other destinations. To lend credibility to the Ponzi scheme and to elude detection, Good also used a portion of investor funds to make payments to earlier investors.
Michael Easley, U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by United States District Judge James C. Dever, III. Internal Revenue Service Criminal Investigation and the N.C. State Bureau of Investigation Financial Crimes Unit investigated the case and Assistant U.S. Attorney
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 7:22-CR-00096-D.
Updated May 24, 2023