In the Courts

In one example, detailed in Merrill's plea agreement, he was introduced to a group of investors known as the "Colorado Group." A representative for the Colorado Group made a number of requests for documentation, including tax returns and a letter from Merrill's certified accountant to confirm there were no unpaid taxes, liens or deficiencies. As the true documents were inconsistent with Merrill's claims to the Colorado Group, he had Ledford create a new tax return with an adjusted gross income and a false letter stating full compliance with all taxation filings. When Ledford emailed the falsified tax return to Merrill he replied "Perfection — Thanks my Shady friend." After the Colorado Group agreed to invest, Merrill forwarded the email to Ledford and added the message "Boom." At other times Merrill and Ledford made efforts to conceal the amount of fraudulent proceeds from their activities even from each other. Ledford, for example, would overstate the purchase price to Merrill for a portfolio so that he could keep the additional mark-up for himself. Merrill, in turn, did not always tell Ledford how much he received from investors, in one case misrepresenting over $2.6 million in new monies from Singaporean investors as non-existent "mixed credit card portfolios" to his co-conspirator.

The scheme ultimately took in over $396 million from investors located in Maryland, Washington, DC, Virginia, Colorado, Texas, Chicago, New York, and elsewhere, with the individual victims including doctors, lawyers, accountants, small business owners, restauranteurs, construction contractors, retirees, bankers, talent agents, professional athletes, and financial advisors. At the time of their arrest, the co-conspirators were also in the process of fraudulently obtaining a further $260 million from investors. The funds were used for the co-conspirators personal benefit. Merrill used the money to support a lavish lifestyle, purchasing a home in Florida, purchasing and/or renovating five homes in Maryland, and funding the acquisition of luxury cars, artwork, sports memorabilia, jewelry, a share in a private plane, life insurance and gambling monies.

As further detailed in his plea agreement, Merrill had met with the FBI while the scheme was ongoing and provided false information and documents to investigating agents. After his arrest, Merrill also attempted to obstruct justice by causing his wife to conceal assets from the court-appointed receiver.

Following their guilty pleas, Judge Bennett sentenced Ledford to 14 years and Jezierski to 24 months in prison respectively for their roles in the scheme. Merrill's wife, Amanda Merrill, 30, has plead guilty to conspiracy to remove and conceal assets in violation of court orders, and is due to be sentenced in January 2020.

The U.S. Securities and Exchange Commission (SEC) has an ongoing parallel civil action in this matter.

The criminal case is USA v. Merrill et al., in the in the U.S. District Court for the District of Maryland (case number 1:18-cr-00465); and the parallel civil case is SEC v. Merrill et al., also in the U.S. District Court for the District of Maryland (case number 1:18-cv-02844)

— Juliet Gunev, Mayer Brown