Fallcatcher Principal Who Defrauded Investors Out of Approximately $5 Million Sentenced to Five and a Half Years in Prison

PHILADELPHIA – United States Attorney David Metcalf announced that Henry Ford, also known as Cleothus “Lefty” Jackson, 51, of Port St. Lucie, Florida, was sentenced today to 66 months in prison, three years of supervised release, and $2,095,480 in restitution by United States District Judge Joel H. Slomsky, for defrauding investors out of approximately $5 million.

Ford was charged by indictment in March 2023 and pleaded guilty in May of last year to one count of securities fraud and seven counts of wire fraud.

According to court documents and statements made in court, Ford founded and operated a business named Fallcatcher, the stated goal of which was to develop and market an electronic system designed to track use of medication by addiction recovery patients to prevent relapse.

In May 2018, Ford was seeking additional investors in Fallcatcher, which had been running out of funding. At this time, Ford used an acquaintance in the Eastern District of Pennsylvania who had access to a network of investors to raise funds from these investors. Ford provided his acquaintance false and misleading information about the Fallcatcher investment proposal, so that the acquaintance would agree to send the information to his investor network.

Additionally, Ford made presentations in person to potential investors, who were part of this acquaintance’s network, at locations in Pennsylvania and New Jersey. During these presentations, Ford made false and misleading statements regarding the proposed investment opportunity and showed investors a fraudulent letter of interest, which falsely stated that a major insurance company had agreed to conduct a pilot program using Fallcatcher’s system. Ford caused his acquaintance to distribute further false and misleading statements after these presentations.

As a result of these deceptive fundraising efforts, Ford caused approximately 60 investors to invest about $5 million in total in Fallcatcher.

In 2018, the Securities and Exchange Commission (“SEC”) began to investigate Ford’s acquaintance, which resulted in a request for documents from Fallcatcher. During the SEC investigation, in the fall of 2018 and the first half of 2019, Ford took various actions to conceal his fraud upon the investors in Fallcatcher. For example, Ford, through his counsel, produced to the SEC an email purporting to show that the fraudulent letter of interest described above was legitimate. In fact, the email produced to the SEC, like the letter of interest, was also shown to be false and fabricated.

This case was investigated by the FBI and prosecuted by Assistant United States Attorneys Patrick J. Murray and Francis A. Weber. The SEC’s New York Regional Office investigated and litigated the civil securities fraud charges, which formed the basis of a portion of the criminal prosecution.