Investment Advisor Pleads Guilty to $6.1 Million Ponzi Scheme
NORFOLK, Va. – A Chesterfield man who owned and operated an investment firm in Virginia Beach pleaded guilty today to mail fraud and engaging in monetary transactions in criminally derived property.
According to court documents, Edward Lee Moody, Jr., 47, was a registered investment adviser and the sole owner and operator of CM Capital Management LLC, an investment firm with its principal office located in Virginia Beach. Moody solicited investors on the basis of his representation that he would profitably invest their assets in securities on their behalf and manage those investments on an ongoing basis. In reality, he ran a Ponzi scheme over a 13-year period, during which he solicited and collected approximately $6.1 million from 53 investors, at least 13 of whom were elderly persons who liquidated assets from their existing, legitimate retirement accounts in order to provide funds to him that they expected he would invest on their behalf. In most instances, Moody did not manage the accounts of the investors or buy or sell securities on their behalf, and did not even open individual brokerage accounts for them. Instead, Moody diverted investor monies for his own personal benefit and to enrich himself, using at least $1.4 million for business expenses, to purchase a home, make car loan payments, shop, travel to Las Vegas and other destinations. He also used approximately $885,000 of investor monies to buy and sell securities on his own behalf. Moody perpetuated the scheme by using approximately $1.5 million that he received from new investors to make periodic lulling payments to earlier investors, and he provided investors with fraudulent monthly account statements that falsely indicated that the investors’ funds had been invested in securities and had earned returns.
Moody faces 20 years in prison on the mail fraud charge and 10 years for engaging in monetary transactions in criminally derived property when sentenced on Feb. 5, 2019. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, Martin Culbreth, Special Agent in Charge of the FBI’s Norfolk Field Office, and Kelly R. Jackson, Acting Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), made the announcement after Senior U.S. District Judge Robert G. Doumar accepted the plea. Assistant U.S. Attorney Alan M. Salsbury is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:18-cr-154.