Former Owner of Investment Firms Arrested for $8 Million Fraud
RICHMOND, Va. – Merrill Robertson, Jr., 36, of Chesterfield, former owner of two Richmond area investment firms, was arrested this morning for his role in an investment fraud scheme that caused over $8 million in losses to his clients.
According to the affidavit filed in support of the criminal complaint, in 2009, Robertson and a co-conspirator started Cavalier Union Investments, LLC. Between 2009 and 2015, Cavalier obtained at least $8 million from over 40 investors. During this time, Robertson made material misrepresentations and omissions about the use of investor funds, the assets securing investor funds, and the investment vehicle into which investor funds would be deposited. Robertson also signed promissory notes with many investors that guaranteed a specific rate and return, pledged that investment funds were secured by tangible assets, and provided many investors with annual statements that misrepresented the value of their investment at the time and the account number where investment funds were supposedly located. During a deposition with the U.S. Securities and Exchange Commission (SEC) in October 2015, Robertson acknowledged that Cavalier failed to pay back the approximately $8 million in principal invested with the company and stated that Cavalier currently has no income or assets. Robertson admitted that he often commingled business, personal and investor funds. Robertson stated that he used investor funds to pay for personal expenses such as his mortgage and car payments.
In a parallel action, the SEC today announced civil charges against Robertson.
Robertson faces a maximum penalty of 20 years in prison if convicted of conspiracy to commit wire fraud. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Thomas Jankowski, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), made the announcement after Robertson’s arrest. Assistant U.S. Attorney Katherine Lee Martin is prosecuting the case.
This investigation was initiated based on information received from the U.S. Securities and Exchange Commission (SEC) and is currently being investigated by the FBI's Richmond FIeld Office, IRS-Criminal Investigations, U.S. Postal Inspection Service, and the Virginia State Corporation Commission
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:16-mj-197.