Salisbury, N.C. Man Sentenced To Prison For Operating A $2 Million Ponzi Scheme And For Failing To Appear In Court
United States Attorney Anne M. Tompkins Western District Of North Carolina
Defendant Did Not Show Up For His January 2013 Sentencing Hearing
CHARLOTTE, N.C. –U.S. District Judge Robert J. Conrad, Jr. sentenced a Salisbury man to 121 months in prison for operating a Ponzi scheme that defrauded his victims of more than $2 million and for failing to appear in court for his previously scheduled sentencing hearing on that case, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
John Knox Bridges, 52, of Salisbury, was also ordered to serve three years under court supervision following his prison term, and to pay $1,534,536.70 as restitution to his victims.
Joining U.S. Attorney Tompkins in making today’s announcement is John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service - Criminal Investigation Division (IRS-CI).
According to filed court documents and court proceedings, from 2004 to 2010 Bridges engaged in a series of schemes to defraud individual investors and charitable organizations by soliciting his victims to invest in a fictitious company, “Logan Investments.” Court documents show that Bridges made false representations to his investors, including that their money would be invested in a private oil company in Texas and that the company was building a pipeline to transport liquid petroleum across the U.S. Court records indicate that Bridges further misrepresented to his victims that their money would be deposited into the oil company’s account and be used for construction expenses. To further the fraudulent scheme, Bridges told the victim investors that he would provide them with quarterly dividends while the pipeline was being constructed. In reality, none of the representations Bridges made to the victims were true. Information contained in court documents indicates that Bridges deposited the money in his own personal bank account, and used the money to fund personal trips abroad and to pay for his personal living expenses.
According to filed documents and statements made in court, Bridges made payments to some existing investors using funds contributed by new investors, typical of a “Ponzi” scheme. To cover his fraud and to induce individuals to further invest in his fictitious company, Bridges regularly sent investors bogus profit and loss statements from Logan Investments, which falsely showed positive returns. In reality, Bridges generated those fictitious statements from his home computer and were entirely false.
Court records show that in 2008 Bridges solicited a charitable organization known as “L.F.” to invest $350,000 in a fictitious company, which Bridges falsely represented as an oil and gas company identified as Ligon-Johnson. Among the misrepresentations made to “L.F.” was that the investment guaranteed returns of approximately 9.75 percent. Instead of investing the money, Bridges used the funds to settle a civil lawsuit filed against him personally, court records show. According to court documents, in early 2009 Bridges received an additional $250,000 from the same charitable organization to invest in a start-up company. Bridges falsely represented that the start-up would “turn a profit of 30% in 6 months,” records indicate. Instead of investing the money in the start-up company, Bridges fraudulently placed the investment funds in his name.
According to filed documents, in the summer of 2009 “L.F.” became suspicious of Bridges’ actions. In an attempt to conceal and prolong the scheme, Bridges wired $600,000 to “L.F.” from a second charitable organization known as “T.M.,” according to court documents. Also, in an effort to further induce additional investment funds, Bridges lied to current and additional investors by fraudulently telling them that his computer had been hacked and $600,000 was emptied out of his personal bank account.
In total, court records show, Bridges obtained approximately $2 million from the victims of the Ponzi scheme. In February 2012, Bridges pleaded guilty to one count of securities fraud and one count of money laundering.
“Today, a greedy con artist got the punishment he deserved,” said U.S. Attorney Tompkins. “This was not a case of a good investment gone bad. Bridges stole money from his investors and used it for trips and personal expenses, while he continued to tell lie after lie to cover his fraud. Potential investors should do their homework before they invest their hard earned money and question promises of large investment returns. Don’t let a con man with a good sales pitch rob you of your precious nest egg,” Tompkins added.
“The FBI is committed to vigorously pursuing scammers who commit financial crimes and rob unsuspecting investors of their savings. This case sends a clear message that criminals who run these illicit investment schemes will face severe penalties for their fraud,” said FBI Charlotte Special Agent in Charge, John A. Strong.IRS-CI Special Agent in Charge Jeannine Hammett stated, “Promoters of Ponzi schemes prey upon trusting investors and then steal their hard earned money. John Knox Bridges did that in order to finance his lifestyle. Investors should be wary that programs promising unbelievable returns on investment should be looked at carefully.
Judge Conrad also sentenced Bridges today to 18 months in prison on criminal contempt charges for failing to appear at his first sentencing hearing, to be served concurrently. According to court records, despite knowing the date and time he was due to appear in federal court, Bridges did not show up for the sentencing, causing the court to issue a bench warrant for his arrest. According to court documents, the following day Bridges’ vehicle was located in Salisbury at the parking lot of a church. Court records also indicate that when law enforcement arrived at the church, Bridges armed with a shotgun had barricaded himself in the church’s women’s bathroom. Law enforcement convinced Bridges to surrender and the defendant was subsequently arrested. Bridges pleaded guilty on July 23, 2013 to criminal contempt charges in connection with that incident.
In announcing today’s sentence Judge Conrad described the defendant as having “a history of ongoing predatory behavior,” noting that Bridges’ “primary motivation was to fund a lavish lifestyle.”
In addition to providing for restitution to victims, federal law also provides for forfeiture of proceeds of crime. Accordingly, Judge Conrad sentenced Bridges to forfeit certain properties, including numerous pieces of art. The U.S. Attorney’s Office will request that the proceeds from the liquidation of any finally forfeited assets be paid to victims.
Bridges has been in federal custody since he was arrested in January 2013 after he failed to appear at the sentencing hearing. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by the FBI and IRS-CI. The prosecution was handled by Assistant U.S. Attorney Maria Vento of the U.S. Attorney’s Office in Charlotte.