Ponzi Scheme suspect makes use of underwater scooter to flee FBI


By: New York Times |

November 19, 2020 1:43:57 pm





A photograph offered by the US Division of Justice exhibits the ocean scooter Matthew Piercey used to evade the FBI. (United States Division of Justice by way of The New York Occasions)

When authorities went to arrest Matthew Piercey on Monday for what they mentioned was his function in operating a $35 million Ponzi scheme, he took off in his truck and led them to Shasta Lake, the biggest man-made reservoir in California.

Tracked by air and trailed by FBI brokers and members of the California Freeway Patrol, Piercey, 44, of Palo Cedro, California, was seen eradicating one thing from his truck and getting into the frigid water with it in his road garments, authorities mentioned. After about 25 minutes within the lake, a part of which he spent submerged, a really chilly and moist Piercey emerged and was arrested, the Justice Division mentioned.

The brokers allowed him to alter into dry garments that they’d obtained from his spouse earlier than escorting him to the closest FBI discipline workplace, in Sacramento, the division mentioned.

Piercey’s pink Yamaha 350Li, an underwater sea scooter, was taken as proof, authorities mentioned. The commercially obtainable, battery-powered scooter has an enclosed propeller that may pull a diver underwater at slightly below 4 mph, a lot quicker than people can transfer with fins.

It was not clear how lengthy Piercey was underwater. Neither the FBI nor the Justice Division answered questions on whether or not he used a snorkel or any sort of scuba gear to remain submerged.

The Justice Division famous in a detention memorandum, nonetheless, that Piercey “spent a while out of sight underwater the place regulation enforcement might solely see bubbles.”

Piercey was accused in a federal indictment of operating a Ponzi scheme that bilked buyers out of roughly $35 million between 2016 and earlier this yr by means of two corporations he helped run, Household Wealth Legacy and Zolla Monetary.

Household Wealth Legacy solicited investments in securities, cryptocurrency mining and life insurance coverage, the indictment says. Zolla Monetary raised funds by means of transactions that “have been sometimes styled as loans providing a hard and fast return, with the corporate’s returns purportedly generated by means of algorithmic buying and selling,” based on the Justice Division.

“Piercey usually paid off his strains of credit score, bank cards, and private and enterprise bills with investor funds, and his corporations didn’t generate income ample to cowl overhead and bills whereas nonetheless paying buyers the returns they have been promised or in any other case led to anticipate,” the Justice Division mentioned within the detention memorandum.

The Justice Division mentioned Piercey had a sample of paying outdated buyers with cash he raised from new buyers “whereas making varied false and deceptive statements, half-truths, and omissions” to cover his “fixed downward monetary spiral.”

Piercey faces 31 felony counts, together with wire fraud, mail fraud, witness tampering and cash laundering. Every rely carries a most penalty of 20 years in jail.

A colleague of Piercey’s, Kenneth Winton, 67, of Oroville, California, was charged individually Monday with a single rely of conspiracy to commit wire fraud.

Messages left with David Fischer, a lawyer representing Piercey, weren’t instantly returned. Adam Gasner, a lawyer for Winton, mentioned in an announcement that his shopper “was made conscious of those allegations and can instantly and voluntarily seem in court docket.”

“Mr. Winton is a household man with no prior prison document and desires to handle the conduct alleged to have been dedicated by him and never be prejudiced by the actions of others charged on this case,” Gasner mentioned.

Josh Kons, a lawyer who represents buyers in securities fraud issues, mentioned he was shocked by Piercey’s try and elude regulation enforcement.

“You by no means actually know what individuals are interested by once they get indicted or when the FBI tries to bang down their door, however actually this one goes down within the books,” mentioned Kons, who has consulted with individuals who say they misplaced cash to Piercey. “I don’t know if we’ll ever see a extra novel escape try by a Ponzi scheme artist once more.”

The audacity of Piercy’s run from the regulation, Kons mentioned, mustn’t obscure the human prices of this type of fraud.

“Ponzi schemes actually harm individuals,” he mentioned. “It’s pretty uncommon that victims get greater than pennies on the greenback in any respect, and it actually appears that these individuals could undergo a whole loss.”

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