Local Man Arrested for $30 Million Securities and Wire Fraud Scheme
HOUSTON – A 62-year-old Houston man has been taken into custody following the return of a federal indictment charging him for his role in a securities fraud and wire fraud scheme involving more than $30 million, announced Acting U.S. Attorney Abe Martinez.
A grand jury returned a 21-count indictment Dec. 7, 2017, against Ray Charles Davis. He was taken into custody this morning and is expected to make his initial appearance before U.S. Magistrate Judge Dena H. Palermo at 10:00 a.m. today.
According to the indictment, the scheme involved defrauding investors in Behavioral Recognition Systems Inc. (BRS) by making false and misleading statements to investors in order to fraudulently induce them to purchase shares of BRS. He also unlawfully embezzled money from BRS, according to the charges.
Pursuant to the scheme, Davis allegedly made false statements to investors regarding his salary, how the proceeds of their investments would be used and the financial condition of BRS. As a result of the scheme, Davis defrauded investors out of a total of approximately $32 million and unlawfully embezzled more than $11 million from BRS during the scheme, according to the indictment.
If convicted, he faces up to 20 years in prison for the securities fraud charge as well as each of the 20 counts of wire fraud. The charges also carry a possible $250,000 maximum fine.
The FBI conducted the investigation. The Securities and Exchange Commission also provided information that assisted in the overall investigation. Assistant U.S. Attorney Justin R. Martin is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.