Miami, Florida – Two South Florida securities attorneys and the former COO of 1 Global Capital LLC (“1 Global”) have been convicted of their role in a massive fraud scheme that has affected over 3,600 investors in 42 states.
Andrew Dale Ledbetter, 79, of Fort Lauderdale, Fla., Pleaded guilty to one count of information, charging him with one count of conspiracy to commit wire fraud and securities fraud, in violation of Title 18, United States Code, Section 371 (Case # 20-CR-60103), and was sentenced today to 60 months in prison by U.S. District Judge Roy K. Altman. Ledbetter was also ordered to pay more than $ 148,976,248 million in damages to the victims of the scheme.
Steven Allen Schwartz, 76, of Delray Beach, Fla., Pleaded guilty to one count, charging him with one count of conspiracy to commit wire fraud and securities fraud, in violation of the Title 18, United States Code, Section 371 (Case # 20-CR-60003) and on July 9, 2021, U.S. District Court Judge Roy K. Altman sentenced Schwartz to 24 months in jail. Schwartz was also ordered to pay more than $ 36 million in restitution to the victims of the scheme.
Jan Douglas Atlas, 76, of Fort Lauderdale, Fla., Pleaded guilty to one count of information, charging him with one count of conspiracy to commit wire fraud and securities fraud, in violation of Title 18, United States Code, Section 371 (Case No. 19-CR-60258), and on August 20, 2021, U.S. District Court Judge Roy K. Altman sentenced Atlas to imprisonment for 8 months. Atlas was also ordered to pay more than $ 29 million in restitution to the victims of the scheme.
According to court documents, 1 Global was a Hallandale Beach, Florida-based commercial lending company that provided the equivalent of “payday” loans to small businesses at high interest rates, known as cash advance loans. merchants (“MCA”). Schwartz was a director and consultant at 1 Global, and also served as COO in the company’s marketing materials. Ledbetter was a Licensed Attorney in the State of Florida who served as Legal Counsel at Law Firm No. 1 and acted as a fundraiser at 1 Global from or around 2015. Atlas was a partner in the law firm No. 1 and acted as an external lawyer. for 1 Global.
Important questions arose during the operation of the business as to whether 1 Global was offering or selling a security and whether the investment offer should be registered with the United States Securities and Exchange Commission. These questions have been raised by investors, investment advisers and regulators. Ledbetter and Atlas knew that if 1 Global’s investment offer were considered a security, it would compromise 1 Global’s ability to raise funds from retail investors and continue to operate without substantial additional expenses and requirements. reporting. Such a classification would jeopardize the profits and costs that Ledbetter and other executives of 1 Global would be able to obtain from 1 Global operations.
At the request of 1 Global executives, Atlas wrote two op-eds in 2016 containing false information that Atlas knew would be used by 1 Global to illegally operate the business. The op-eds falsely described the duration of the investment, among other things, omitting the automatic renewal aspect and stating that the investment was intended for unsophisticated retail investors (such as IRA account holders). Ledbetter has used and relied on Atlas opinion letters to continue to fundraise illegally, in numerous arguments and communications to investment advisers and investors.
According to court documents, Ledbetter was personally involved in raising over $ 100 million in funds from investors who went to 1 Global, through his own arguments as well as through investment advisers who ‘he attracted to 1 Global. Over the years, Ledbetter has received around $ 3 million from 1 Global, the majority of which was for commissions. Atlas received approximately $ 627,000 in commissions from Ledbetter. Neither lawyer disclosed these commissions to Law Firm # 1. Ledbetter has regularly introduced himself to investors and investment advisers as an external advisor to 1 Global, and has also vouched personally for 1 Global in presentations and marketing materials, without disclosing his extravagant commissions.
In addition, in order to attract investment, Individual # 1 (the de facto owner of 1 Global), Schwartz, Ledbetter and others, have made false and misleading representations to investors and potential investors about the profitability of 1 Global’s business in marketing materials and periodic account statements.
Alan G. Heide, the former 1 Global Chief Financial Officer, had already been indicted by means of denunciation and sentenced to 60 months (case n ° 19-CR-60231). Information on related cases can be found here: https://www.justice.gov/usao-sdfl/1Global-Capital.
Juan Antonio Gonzalez, Acting United States Attorney, Southern District of Florida, George L. Piro, Special Agent in Charge, Miami Field Office of the Federal Bureau of Investigation (“FBI”), Matthew D. Line, Agent Acting Special Agent, Internal Revenue Service, Criminal Investigation (“IRS-CI”), and Kyle A. Myles, Special Agent in Charge of the Office of the Inspector General of the Federal Deposit Insurance Corporation (“FDIC”), have made the announcement.
The FBI Miami, IRS-CI, Miami Field Office, and FDIC-OIG have investigated the case. This case is being continued by the assistant of the American prosecutor Elizabeth Young. Assistant U.S. Attorney Nicole Grosnoff is handling the asset forfeiture related to the case.
Court documents and related information are available on the South Florida District Court website at www.flsd.uscourts.gov or http://pacer.flsd.uscourts.gov under file number 20-cr-60103.