Charlotte Man Sentenced to More Than Five Years in Prison for Defrauding Investor in Ponzi Scheme
CHARLOTTE, NC—Today, U.S. District Judge Max O. Cogburn, Jr. sentenced John Reid Perkins, 45, of Charlotte, to serve 64 months in prison followed by three years of supervised release on securities fraud conspiracy charges and for violating the terms of his supervised release stemming from a previous federal conviction, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Perkins, who pleaded guilty in September 2013 to one count of securities fraud conspiracy, was also ordered to pay $805,150 as restitution.
Perkins’ conspirator, Terry Wayne Gandy, 51, or Myrtle Beach, S.C. was sentenced in December 2014 to 57 months in prison and three years of supervised release for his role in the conspiracy and was ordered to pay $3,076,411.34 in restitution to his victims.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI) and B.W. Colier, Acting Director of the North Carolina State Bureau of Investigation (SBI) join U.S. Attorney Tompkins in making today’s announcement.
According to filed court documents and court proceedings, from 2006 to 2008 Perkins conspired with Gandy and others and tricked victims into investing in a fraudulent real estate investment scheme. Court records show that Perkins owned and operated “Master Home Solutions” (“MHS”), a company that purportedly purchased, remodeled, renovated and resold foreclosed homes. Based on court records, Perkins induced victims by falsely representing their money would be invested in real estate projects through MHS, when, in fact, very little of that money was ever invested. Instead of investing the investors’ money as promised, Perkins, Gandy and others used the funds to pay themselves and to support their lifestyles, including to pay bills, buy cars, and make large cash withdrawals.
According to court documents and court proceedings, the conspirators also used some of the victim’s money to pay purported “profits” to other investors, falsely characterizing them as “gains on investments.” Perkins and his conspirators also used new victims’ money to make payments to old victim-investors, commonly known as “Ponzi” payments. Court records indicate that Perkins and his conspirators further lied to victims, falsely telling them their money was tied up in investments with specific “maturity periods.” In some instances, the defendants advised victims that additional investment funds were needed in order to secure the return of the victims’ original investment, court records indicate.
In handing down the 64 month sentence, Judge Cogburn stressed the significant damage caused to victims by Perkins’ greed and noted that the lengthy sentence was needed to protect the public from futures crimes of the defendant.
In 2007, Perkins was convicted on federal conspiracy, identification document fraud, wire fraud and aggravated identity theft charges and served 33 months in prison. Perkins began a five-year period of supervised release in November 2010. Judge Cogburn revoked Perkins’ supervised release because Perkins violated several of his conditions by, among other things, engaging in unauthorized travel and defrauding a victim of approximately $125,000 in a sham tugboat sale. Perkins was remanded into federal custody following the sentencing hearing. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by the FBI, IRS, and SBI. Assistant United States Attorney Mark T. Odulio of the U.S. Attorney’s Office in Charlotte prosecuted the case.