Former Lee’s Summit Man Pleads Guilty in $3 Million Ponzi Scheme
|U.S. Attorney’s Office November 05, 2013|
KANSAS CITY, MO—Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a former Lee’s Summit, Missouri man pleaded guilty in federal court today to defrauding 39 investors in a $3 million Ponzi scheme.
Ronald W. Shepard, 74, formerly of Lee’s Summit, pleaded guilty before U.S. District Judge Gary A. Fenner to mail fraud.
Shepard received approximately $3,188,765 from approximately 39 investors from January 2006 through December 2009. Shepard returned approximately $1,235,853 to the investors and lost or spent the rest, resulting in a minimum loss to investors of $1,825,883.
Shepard, who prepared tax returns for individuals, discussed their investments and pitched his own companies as investments. Shepard’s company, Safety Solutions USA LLC, in Lee’s Summit, developed and marketed a trailer hitch called Tow-Safe. A patent request for the trailer hitch safety device was filed but rejected by the U.S. Patent Office. Shepard also operated a company called The Real Estate in Lee’s Summit.
Shepard claimed that investors would make anywhere from a 15 percent to 100 percent annual return on their investment. He failed to inform potential investors that the state had issued a cease and desist order that barred him from offering or selling any unregistered security. Shepard has never been registered to sell securities in the state of Missouri.
Shepard told investors that their money was used to purchase property in Kansas City, the Lake of the Ozarks, and Hawaii. Except for purchasing his own personal residence at the Lake of the Ozarks; however, Shepard did not purchase any real estate. Instead, Shepard used investor funds for personal living expenses, to pay other investors, and to pay relatives in disbursements of cash to himself and in real estate ventures.
Many investors liquidated their Individual Retirement accounts or 401(k) accounts and transferred the proceeds to Shepard for investment. Shepard told investors that if they liquidated retirement funds, thereby incurring penalties, he would refund their initial investment, plus the amount of penalty, plus interest.
Under the terms of today’s plea agreement, Shepard will be sentenced to two years in federal prison without parole, to be served concurrently with the five-year sentence he is currently serving after his supervised release was revoked in another case. Shepard must pay a total of $1,825,883 in restitution to his victims.
This case is being prosecuted by Assistant U.S. Attorney Kate Mahoney. It was investigated by the FBI and the Missouri Division of Securities.