NORFOLK, Va. (WVEC) — A man pleaded guilty to mail fraud and engaging in money transactions in criminally derived property on Monday.
According to court documents, 47-year-old Edward Lee Moody, Jr. owned and operated an investment firm in Virginia Beach. He was a registered investment adviser and sole owner of CM Capital Management LLC.
Moody solicited investors by claiming he would invest assets in securities on their behalf and manage those investments on an ongoing basis. In reality, he ran a Ponzi scheme for over 13 years, and he collected about $6.1 million from 53 investors. Thirteen of the investors were elderly persons who liquidated assets from their existing, legitimate retirement accounts in order to provide funds to him that they expected he would invest on their behalf.
Moody would not manage the investor's accounts or buy or sell on their behalf. He didn't even open individual brokerage accounts for them.
Instead, Moody diverted the investors' money for his own personal benefit. At least $1.4 million of the money was used for business expenses, to purchase a home, make car loan payments, shop, and travel.
He also used about $885,000 to buy and sell securities on his own behalf. Moody perpetuated the scheme by using approximately $1.5 million that he received from new investors to make periodic lulling payments to earlier investors, and he provided investors with fraudulent monthly account statements that falsely indicated that the investors’ funds had been invested in securities and had earned returns.
In total, Moody faces 20 years in prison on the mail fraud charge, and 10 years for engaging in monetary transactions in criminally derived property. he is expected to be sentenced on February 5, 2019.
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