A Georgia-based advisor and minority proprietor in a minor league baseball workforce pleaded responsible to defrauding not less than $25 million from buyers in a Ponzi scheme spanning greater than a decade.
It marks the newest growth in a case wherein FINRA fined Oppenheimer & Co., the advisor’s former employer, $35 million.
John J. Woods, the previous president of Southport Capital and the supervisor of Horizon Non-public Fairness III, pleaded responsible to 1 rely of wire fraud in Georgia federal court docket final week, in line with the Justice Division. Keri Farley, the particular agent answerable for FBI Atlanta, stated the plea would supply aid to victims of Woods’ “greed-fueled conduct.”
Woods’ Ponzi scheme started in 2008 and lasted till the Securities and Change Fee shut it down in July 2021. Although SEC and DOJ filings don’t identify Woods’ advisory agency from 2008 via 2016, he labored at Oppenheimer & Co. throughout that point, in line with his BrokerCheck profile.
He additionally was a minority proprietor of the Chattanooga Lookouts, a Minor League Baseball Class AA affiliate of the Cincinatti Reds, although the workforce lower ties with Woods after the allegations got here to gentle, in line with reporting from FOX 12 Chattanooga.
Since 2006, Woods owned a fund known as Horizon Non-public Fairness, which purchased Southport Capital, an SEC-registered funding advisor, in 2008. He positioned a member of the family because the agency’s nominal supervisor earlier than taking on full management in 2017, in line with the DOJ.
Woods, in addition to different Southport IARs, informed Horizon buyers they’d get 6%-7% curiosity on their investments in month-to-month installments, with low-risk investments in authorities bonds, shares and actual property.
However as Woods knew, buyers’ returns had been largely being paid from cash of recent and current buyers, with the fund’s skill to pay the curiosity counting on liquidating current investments or utilizing new shoppers’ cash. Woods didn’t relay any of this to his shoppers, lots of whom had been retirees.
“Horizon didn’t earn any vital earnings from authentic investments; as a substitute a really massive proportion of purported ‘returns’ to earlier buyers had been merely paid out of recent investor cash,” a DOJ doc detailing the allegations learn.
By the point the SEC shut the scheme down in July 2021, Horizon buyers had been owed greater than $110 million in principal, having already misplaced greater than $25 million. In complete, Horizon had greater than 400 buyers in 20 states, in line with the DOJ. As a result of there was little correct documentation, thousands and thousands in harmed buyers’ funds weren’t accounted for, and even as much as the SEC’s 2021 motion, the fund continued to attract in about $600,000 monthly from new buyers.
Sentencing for Woods has not but been scheduled. Representatives from Oppenheimer & Co. declined remark.