Lynchburg Man Sentenced for Running Ponzi Scheme
Jeffrey Tuggle Bilked Investors Out of More Than $400,000
|U.S. Attorney’s Office November 04, 2009|
LYNCHBURG, VA—A local man who defrauded investors of more than $400,000 in a Ponzi scheme, was sentenced today in U.S. District Court.
Jeffery Thomas Tuggle, 45, of Lynchburg, devised an elaborate scheme in which he marketed “advance fee investment opportunities” to clients in order to fuel his gambling habit. In August, he pled guilty to two counts of tax fraud, one count of wire fraud and one count of failing to file a tax return. Today in District Court, he was sentenced to 36 months’ of incarceration. He was also ordered to pay restitution in the amount of $477,115 to the victims in this case and $156,181 to the Internal Revenue Service.
“Mr. Tuggle cultivated the trust of his clients by promise of high investment returns. He abused that trust by stealing money from hard working, innocent people,” United States Attorney Timothy J. Heaphy said today. “The United States Attorney’s Office remains committed to finding and prosecuting every individual who commits financial fraud. We cannot allow con men like Mr. Tuggle to swindle the life savings of industrious residents of this community.”
According to evidence presented by Assistant United States Attorney Ronald M. Huber, between 2004 and 2006 Tuggle devised a Ponzi scheme that promised potential investors returns of between 30-40 percent. He told investors that he was working with a group of lawyers to provide their clients with immediate money for legal judgements they had won. Tuggle told his victims that he and his investors would be repaid with interest when the clients and attorneys received their settlements. These promises were false and designed to deceive the investors so that Mr. Tuggle could enrich himself at their expense.
The defendant had admitted to gambling via the internet and on sporting events using the investors money. Any and all payments Tuggle did make to investors were made with other investors’ money or gambling winnings. In all, approximately 17 investors lost more than $400,000.
During the investigation, law enforcement officials discovered that Tuggle failed to file an income tax return for 2004. In addition, the tax returns he did file between 2005-2006 contained numerous false statements, including failing to report accurate yearly income.
The investigation of the case was conducted by the Bristol, Virginia Office of the Internal Revenue Service Criminal Investigation, the Federal Bureau of Investigation, and the Campbell County Sheriff’s Office. Assistant United States Attorney Ronald M. Huber is prosecuting the case for the United States.