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Justice News

Department of Justice
U.S. Attorney’s Office
Western District of North Carolina

FOR IMMEDIATE RELEASE
Friday, March 24, 2017

Federal Indictment Charges Murphy, N.C. Man with Wire Fraud for $800,000 Investment Fraud Scheme

U.S. Attorney’s Office to Host Seminar in Asheville on Friday, March 31, 2017, on Investment Fraud Schemes Targeting Elderly Investors

CHARLOTTE, N.C. – A criminal indictment was returned by a federal grand jury charging Alan Peter Darcy, 78, of Murphy, N.C., with wire fraud for orchestrating an $800,000 investment fraud scheme, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  

North Carolina Secretary of State Elaine F. Marshall and John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, join U.S. Attorney Rose in making today’s announcement. 

According to allegations contained in the indictment, in or about February 2012 through at least June 2016, Darcy engaged in a scheme to defraud multiple victims of more than $800,000 by inducing them to invest in a variety of bogus financial instruments and products, such as fraudulent “cash flow contracts,” “Joint Participation Agreements,” and leased “Bank Guarantees.” As alleged in the indictment, Darcy claimed to provide various types of project funding and private banking services through Sceptre LLC (Sceptre), Mission 1, LLC (Mission 1), and related entities which Darcy controlled.  Darcy further claimed that he had access to, and multiple successes with, specialized opportunities for obtaining private banking instruments and engaging in lucrative trading opportunities not available to the general public.

The indictment alleges that, through multiple lies and deception, Darcy stole approximately $250,000 from a charitable foundation (Victim Foundation) by falsely representing that the Victim Foundation’s money would be used “to leverage an arbitrage-styled financial investment,” which would result in substantial ongoing monthly payments to the Victim Foundation. The indictment also alleges that Darcy stole approximately $49,000 from a victim-investor by falsely promising he would use her money to create a “private, passive Trust” to generate substantial monthly distributions totaling approximately $1,000,000.  The indictment further alleges that Darcy stole approximately $100,000 from another victim and his affiliates by falsely promising that, among other things, the money would be used to lease a “Bank Guarantee” from an international bank to obtain monthly distributions totaling over $10 million. Similarly, Darcy fraudulently induced a victim-investor and his affiliates to send him via wire transfers approximately $60,000 by falsely promising to generate a return of $1.5 million using a “private bank guarantee.” 

According to the charges, Darcy also induced victims to part with their money by making false and fraudulent representations about the manner in which victims’ money would be used or invested, and about when and how Darcy and his businesses would be compensated.  For example, the indictment alleges that Darcy falsely told certain victims that their investments were fully refundable and that they would be placed in a safe escrow or custodial account.  Darcy also told victims that his businesses would be contributing money to the proposed transactions, and that Darcy and his businesses would be compensated only out of profits from the successful completion of the proposed transactions.

As alleged in the federal indictment, contrary to his representations, Darcy did not hold the victims’ money in escrow or create trust accounts for the victims.  Instead, Darcy deposited the money into bank accounts he controlled and spent more than $400,000 of the victims’ money to fund his personal lifestyle, including through large amounts of cash withdrawals and personal expenditures such as pet care, entertainment, travel and the purchase of a used Jaguar automobile. 

When questioned by victims as to why he was not able to return their money, the indictment alleges that Darcy gave a number of false excuses, including that all international banks had taken “annual holiday.”

The indictment charges Darcy with one count of wire fraud, and he has been ordered to appear in court on a summons. The maximum statutory penalty for the offense is 20 years in prison, a $250,000 fine, or both. All the charges contained in the indictment are allegations.  The defendant is presumed innocent until proven guilty beyond reasonable doubt in a court of law.

In making today’s announcement, U.S. Attorney Rose thanked the North Carolina Secretary and the FBI for leading the joint investigation.  Assistant U.S. Attorneys Daniel Ryan and Daniel Bradley of the U.S. Attorney’s Office are in charge of the prosecution.

 

U.S. Attorney’s Office to Host Seminar in Asheville on Friday, March 31, 2017, on Investment Fraud Schemes Targeting Elderly Investors

The U.S. Attorney’s Office, together with invited guest speakers from the U.S. Securities and Exchange Commission, will host a seminar on Friday, March 31, 2017, from 10:00 a.m. to 12:00 p.m., at the University of North Carolina – Asheville, Highsmith Student Union, Suite 220.  The purpose of the seminar is to educate elderly investors on avoiding investment fraud schemes and safeguarding their savings from potential fraudsters. 

“There are many types of financial fraud scams that target seniors.  As a result, millions of older Americans become victims of financial fraud each year. Perpetrators of financial investment schemes often prey upon older investors, and use a number of tactics and false promises of high returns on investments to convince victim-investors to hand over large portions, if not all, of their savings. Often, by the time the fraud is uncovered, the financial losses sustained by the older investors are devastating and with little hope of financial recovery,” said U.S. Attorney Jill Westmoreland Rose, in announcing the seminar. “That is why financial fraud education is so important. The upcoming seminar is an opportunity to educate seniors about different types of financial investment schemes, the red flags to look out for and some of the ways they can protect themselves from financial investment fraud. Sadly, we come across too many financial fraud victims who might have avoided getting ripped off if they had only known to ask, and insisted upon receiving answers to, some basic question from the beginning.”

The seminar will cover a broad range of topics, including the most common types of investment fraud scams targeting the elderly, red flags to watch out if approached by someone touting an investment opportunity, tips on how to avoid becoming the victim of an investment scheme, and who to contact to report a suspicious investment offer or if you have been the victim of an investment scam. An open discussion and Q&A session will follow the speakers’ presentations.

The seminar is open to the public.  Registration is not required.  RSVPs are encouraged to ensure adequate seating. To RSVP attendance please email USANCW.Conference@usdoj.gov.  For questions please call Lia Bantavani at (704) 338-3140.   

Topic: 
Financial Fraud
Updated March 24, 2017