Wilmington Investment Advisor Pleads Guilty to Charges Related to $7 Million Scheme to Defraud Clients
RALEIGH, N.C. – Shawn Edward Good of Wilmington, pleaded guilty today for his role in a $7 million dollar investment fraud scheme. Good pleaded guilty to wire fraud and money laundering and faces up to 360 months in prison.
“We are cracking down on fraudsters who scam unwitting investors,” said U.S. Attorney Michael Easley. “This investment advisor breached the trust of at least a dozen clients, taking over $7 million – money he promised would go to low-risk investments – and used it to line his pockets, buying real estate, luxury cars, and vacations. This decade-long scam has finally come to an end.”
"High yield investment fraud schemes are designed to appeal to people's hope that 'you can get something for nothing,' often resulting in the total loss of the investment," said Donald “Trey” Eakins, IRS Criminal Investigation Special Agent in Charge of the Charlotte field office. “Be assured that IRS Criminal Investigation, together with our partners at North Carolina State Bureau of Investigation (SBI) and the U.S. Attorney's Office, will hold those who engage in similar behavior fully accountable."
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 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 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 United States Magistrate Judge Robert T. Numbers, Jr. accepted the plea. The Internal Revenue Service Criminal Investigations Unit and the N.C. State Bureau of Investigation Financial Crimes Unit are investigating the case and Assistant U.S. Attorney Toby Lathan is prosecuting the case.
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.