Stockbroker & Operator Of $1.4 Million Ponzi Scheme Sentenced To More Than Five Years For Securities Fraud
STATESVILLE, N.C. – A stockbroker and operator of a $1.4 million Ponzi scheme was sentenced to 63 months in prison by U.S. District Judge Richard Voorhees today, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Charles Caleb Fackrell, 37, of Booneville, N.C., was also ordered to serve three years under court supervision after he is released from prison, and to pay $819,918 as restitution to his victims. Fackrell pleaded guilty to one count of securities fraud in April 2016.
U.S. Attorney Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and North Carolina Secretary of State Elaine F. Marshall.
According to filed court documents and today’s sentencing hearing, from about May 2012 to about December 2014, Fackrell executed a Ponzi scheme using approximately $1.4 million in funds he solicited from at least 20 victim investors in Wilkes County and elsewhere. According to court records, Fackrell was a stockbroker who used his position of trust to solicit victim investors and steer them away from legitimate investments to purported investments with “Robin Hood, LLC,” “Robinhood LLC,” “Robin Hood Holdings, LLC,” “Robinhood Holdings, LLC” and related entities (collectively, “Robin Hood”). These were entities Fackrell controlled and through which he could access the victims’ funds.
Court records indicate that Fackrell solicited his victim investors by making false and fraudulent representations, including that the investors’ money would be invested in, or secured by, gold and other precious metals, when in fact Fackrell spent only a fraction of investor money on such assets. According to court records, Fackrell also falsely told victims that Robin Hood was a very safe investment, paying guaranteed annual returns of 5% to 7%. According to court records, contrary to the promises he made to his victims and instead of investing the victims’ funds as promised, Fackrell used the majority of the money to cover personal expenditures, including hotel expenses, groceries, and medical bills, to make purchases at various retail shops and to make large cash withdrawals. Fackrell also used a portion of the victims’ money to make purported “interest” payments to investors who demanded their money back and to induce further investments from existing investors and their friends and family members. In all, according to court records, Fackrell diverted over $700,000 of his victims’ money – nearly half of the investor money he obtained – back to other investors in Ponzi fashion payments.
According to court records, in an attempt to conceal his fraud, Fackrell asked a third party to destroy a computer and documents related to the Ponzi scheme, explaining that he was in trouble with the U.S. Securities and Exchange Commission.
In making today’s sentencing announcement, U.S. Attorney Rose said, “Fackrell is a scammer. He betrayed his victims who believed his sales pitch and trusted him with their hard-earned money. Fackrell took that money and used it to enrich himself and to perpetuate his fraud. Thanks to the great work of our law enforcement partners Fackrell’s fraud was uncovered, putting a stop to his business of siphoning his clients’ money. His dishonesty caused a lot of financial hardship to a lot of people, and for that, Frackrell will serve a well-deserved prison sentence,” Rose added.
“This is one of the most vicious financial crimes we have seen in North Carolina in many years," Secretary of State Marshall said Tuesday. "Caleb Fackrell was a registered stockbroker who completely betrayed that trusted position to rip off his victims using the name ‘Robin Hood’ in the title of his Ponzi Schemes no less,” Marshall said. “His punishment today is well deserved.”Fackrell has been in federal custody since April 2016. All federal sentences are served without the possibility of parole.
In imposing today’s sentence Judge Voorhees noted the horrendous damage to the victims caused by the defendant involving the loss of their nest eggs, and that the defendant was motivated largely by personal greed.
The investigation was led by the FBI and the Securities Division of the North Carolina Department of the Secretary of State. U.S. Attorney Rose also thanked the North Carolina State Bureau of Investigation, the Yadkinville Police Department and Kinston’s Department of Public Safety for their invaluable assistance in this investigation.
Assistant United States Attorney Daniel Ryan, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.