Hoover Man Sentenced to Seven Years for Role in Prison for Ponzi Scheme That Bilked Millions From Investors
BIRMINGHAM—A federal judge today sentenced a Hoover man to more than seven years in prison for defrauding investors out of more than $3 million through an illegal Ponzi scheme, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton, Alabama Securities Commission Director Joseph P. Borg and Hoover Police Chief Nick Derzis.
U.S. District Judge Virginia Emerson Hopkins sentenced BRYAN W. ANDERSON, 41, to seven years and three months in prison for wire fraud, money laundering and securities fraud. Anderson pleaded guilty to the charges in March. In accordance with his plea agreement with the government, the judge also ordered Anderson to pay restitution of almost $3.1 million to the victim investors and to forfeit that same amount to the government as proceeds of illegal activity. Anderson must report to prison Oct. 19.
“Brian Anderson ran a Ponzi scheme for years, lying about investment options, risks and potential returns to lure unwitting investors into his snare,” Vance said. “Those investors trusted Anderson, and when his Ponzi scheme inevitably crashed down, they lost millions. I am proud of the collaboration among the FBI, Alabama Securities Commission, Hoover Police Department and the U.S. Attorney’s Office that, today, brings Anderson to punishment for his crimes,” she said.
“Along with our partners, the FBI remains committed to investigating those who hide behind deceptive financial fraud schemes and victimize innocent consumers,” Stanton said. “I encourage members of the public to learn ways to protect themselves from fraud at www.stopfraud.gov.”
“While this sentence sends a strong message to Anderson and other con-artists thinking about victimizing Alabamians, nothing will ever make up for the damages caused to victims and their families who lost millions of dollars,” said the ASC’s Borg. “We appreciate the team effort of all agencies involved and were glad to provide resources to assist in an investigation that led to the prosecution of Anderson.”
“I’m very proud of the role our detectives played in the resolution of this complex investigation,” Derzis said. “Our Financial Crimes Unit is continuing to see bigger cases with significant financial losses to victims. In this particular case, we recognized the extent of the fraud committed by Mr. Anderson and contacted the Alabama Securities and Exchange Commission and the FBI,” he said. “We continue to have excellent relationships with our law enforcement partners and this case represents what can be accomplished when we work together.”
According to court documents in the case, Anderson conducted his investment scheme as follows between 2009 and May 30, 2014:
During most of that time, Anderson was a registered financial broker working, first, with MetLife Securities, from October 1998 to February 2012, then with Pruco Securities, from February 2012 to Sept. 13, 2012, when Pruco terminated his employment.
As part of his scheme to defraud investors, he solicited them to invest in stock options that he said employed various trading strategies. The stock options he described were not registered securities, and Anderson had no authority to solicit investor money for the funds.
Anderson also offered investments in a company he owned, 360 Properties. Beginning about 2009, Anderson falsely represented to certain 360 Properties investors that their returns would come from leased property income, when there were no leased properties. Some of the investors believed the 360 Properties investments were affiliated with MetLife, and Anderson did nothing to correct that false belief.
Between January 2009 and January 2014, Anderson’s false investment promises caused about 18 individual and family investors to deliver more than $8.4 million to Anderson, which he deposited into an account he and his wife held at BancorpSouth, a bank based in Tupelo, Miss. When Anderson’s investment scheme collapsed in May 2014, about 12 investors lost about $3.1 million.
Anderson was operating a Ponzi scheme with investor funds, paying returns to existing investors with money from new investors, as well as paying personal expenses. He transferred investor money from one of his and his wife’s bank accounts to another, making only a small percentage of the investments he had promised investors.
Anderson pleaded guilty to wire fraud for causing an investor, identified in court documents by the initials K.C., to wire transfer $571,378 from the investor’s Wells Fargo bank account to Anderson’s BancorpSouth account in the name of 360 Properties on Jan. 15, 2014.
Anderson pleaded guilty to money laundering for taking $368,000 of the $571,378 received from K.C. and, on Jan. 15, transferring it by wire to a second BancorpSouth account. The $571,378 was “criminally derived property” obtained through wire fraud. It is a violation of federal law to engage in a monetary transaction involving money or property worth more than $10,000 that was obtained through a criminal act.
Anderson pleaded guilty to securities fraud for fraudulently obtaining $100,000 from an investor, identified by the initials T.M., on Aug. 20, 2013, by falsely representing that he would invest the money in a specific type of hedge fund. T.M. wired the money from an account at Bryant Bank to one of Anderson’s BankcorpSouth accounts and Anderson took the money and used it for non-investment purposes.
The FBI, ASC and the Hoover Police Department investigated the case, which Assistant U.S. Attorney Pat Meadows prosecuted.