Ponzi Scheme Suspect Uses Underwater Scooter To Escape From FBI

Nov 19, 2020 Travel News

Ponzi Scheme Suspect Uses Underwater Scooter To Escape From FBI

When authorities went to arrest Matthew Piercey on Monday for what they said was his role in running a $ 35 million Ponzi scheme, he took off in his truck and drove them to Shasta Lake, the most large artificial reservoir of California.

Tracked by plane and dragged by FBI agents and members of the California Highway Patrol, Mr. Piercey, 44, of Palo Cedro, Calif., Was seen removing something from his truck and entering the icy water with his street clothes, the authorities told me. After about 25 minutes in the lake, part of which was submerged, a very cold and wet Mr. Piercey emerged and was arrested, the Justice Department said.

Officers allowed him to change into the dry clothes they had obtained from his wife before escorting her to the nearest FBI field office in Sacramento, the department said.

Mr Piercey’s red Yamaha 350Li, an underwater sea scooter, was taken as evidence, authorities said. The commercially available battery-powered scooter has a closed propeller that can pull a diver underwater at just under 4 miles per hour, much faster than humans can move with fins.

It was not known how long Mr. Piercey was underwater. Neither the FBI nor the Justice Department responded to whether he was using a snorkel or any type of scuba gear to stay submerged.

The Justice Department, however, noted in a detention memorandum that Mr. Piercey “spent some time out of sight underwater where law enforcement could only see bubbles.”

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Credit…via CBS Sacramento

Mr Piercey has been charged in a federal indictment with directing a Ponzi scheme that defrauded investors of around $ 35 million between 2016 and earlier this year through two companies he operated. helped manage, Family Wealth Legacy and Zolla Financial.

Family Wealth Legacy has sought investments in securities, cryptocurrency mining and life insurance, the indictment says. Zolla Financial raised funds through transactions that “were generally characterized as loans offering a fixed return, with the returns of the company allegedly being generated through algorithmic trading,” according to the Justice Department.

“Piercey has often paid off his lines of credit, credit cards, and personal and business expenses with investor funds, and his businesses have not generated sufficient revenue to cover overheads and expenses while continuing to pay investors the returns they promised or otherwise expected, ”the Justice Department said in the detention memorandum.

The Justice Department said Mr. Piercey used to pay old investors with money he raised from new investors “while making various false and misleading statements, half-truths and omissions ”to hide its“ constant financial downward spiral ”.

Mr. Piercey faces 31 counts, including wire fraud, mail fraud, witness tampering and money laundering. Each count carries a maximum penalty of 20 years in prison.

A colleague of Mr. Piercey, Kenneth Winton, 67, of Oroville, Calif., Was separately charged Monday with a single count of conspiracy to commit wire fraud.

Messages left with David Fischer, a lawyer representing Mr. Piercey, were not immediately returned. Adam Gasner, an attorney for Mr. Winton, said in a statement that his client “has been made aware of these allegations and will appear immediately and voluntarily in court.”

“Mr. Winton is a father with no criminal record and wishes to address the conduct alleged to have been committed by him and not be harmed by the actions of the other defendants in this case,” Mr. Gasner said.

Josh Kons, a lawyer who represents investors in securities fraud cases, said he was stunned by Mr. Piercey’s attempt to evade law enforcement.

“You never really know what people are thinking when they’re charged or when the FBI tries to knock on their door, but certainly this one is in the books,” said Mr. Kons, who has consulted with people who say they lost money to Mr. Piercey. “I don’t know if we’ll see a more original escape attempt from a Ponzi scheme artist again.

The audacity of Mr Piercy’s escape from the law, Mr Kons said, should not obscure the human costs of this type of fraud.

“Ponzi schemes really hurt people,” he said. “It‘s quite rare for victims to receive more than a few cents on the dollar, and it certainly looks like these people could suffer a total loss.”