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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of North Carolina

FOR IMMEDIATE RELEASE
Wednesday, June 7, 2017

Raleigh Investment Advisor Sentenced to Prison for Orchestrating Ponzi Scheme on Clients

Raleigh - United States Attorney John Stuart Bruce announced that yesterday afternoon in federal court Chief United States District Judge James C. Dever, III sentenced HUGH MONROE DYSON, 67, of Holly Springs, North Carolina, to serve 48 months in federal prison, for committing Mail Fraud. DYSON was also ordered to forfeit the proceeds of the offense, to make restitution, and to serve three years of supervised release.

 

Between 1993 and 2012, DYSON was a registered representative and financial advisor who was employed at two financial services firms in Raleigh, where he provided financial advice to various investor clients. During that same time period, DYSON created a fictitious entity, known as “Keyport Oil,” which purported to be an oil and gas limited partnership. DYSON actively marketed Keyport Oil to his clients and represented that it was a real company that was engaged in petroleum drilling operations in another state.

 

Over 19 years, investors gave hundreds of thousands of dollars to DYSON who, in turn, fabricated stock certificates for investors using scissors, tape, and a copy machine. DYSON did not invest his clients’ money in Keyport Oil. Instead, he used the money on personal expenses and to pay other investors. Periodically, DYSON issued checks to the investors which purported to be a portion of Keyport Oil’s sales revenue. In fact, these funds generally came from the investment funds of other victims. Ultimately, DYSON’s scheme collapsed, and investors lost their entire principal investment.

 

At the sentencing DYSON argued that he should be sentenced to probation to permit him an opportunity to make restitution to his defrauded clients. The court heard argument, however, that since the scheme unraveled in 2012, DYSON had made no effort to repay the investors the money he stole. In fact, the investors had previously sued DYSON in state court and obtained a judgment against him for the same fraud, but DYSON had paid nothing on the judgment. The Court rejected DYSON’s request, and sentenced him to prison for four years.

 

Investigation of this case was conducted by the Federal Bureau of Investigation. Assistant United States Attorney William M. Gilmore represented the United States.

Topic(s): 
Consumer Protection
Updated June 7, 2017