A former Virginia Beach, Va., investment advisor was sentenced to 13 years in prison on Tuesday for running a Ponzi scheme for more than a decade out of his firm CM Capital Management LLC.
Edward Lee Moody Jr., 47, who pled guilty to mail fraud and engaging in monetary gain from criminally derived property, faced a maximum 20-year sentence for scamming 53 investors, including many seniors and even a church, over 13 years.
Instead of opening a single investment account for investors, Moody admitted he took $6.6 million from investors and used a significant portion of the money to buy himself a house, make car loan payments, and shop and travel to Las Vegas and elsewhere. Moody also used $885,000 of investors’ money to buy investments for himself, according to court documents.
Moody successfully solicited investors by falsely claiming he would invest assets in securities on their behalf and manage those investments on an ongoing basis.
"Not only did he fail to buy and sell securities for his victims, but he used their money to actually buy and sell securities for himself," Assistant U.S. Attorney Alan Salsbury argued before sentencing.
To cover his tracks—and create the impression his firm was actually successfully investing client funds—Moody paid out about $1.8 million he received from new investors to earlier investors. He also provided investors with fraudulent monthly account statements that showed investments that had never been made. His elaborate ruse was effective, allowing him to run the Ponzi scheme for 13 years until March, 2018, prosecutors said.
During sentencing, U.S. District Judge Robert G. Doumar called Moody "the great pretender” who believed it was acceptable to steal from the elderly and retired, and a church.
Thirteen of Moody’s victims were elderly persons who liquidated assets from their legitimate retirement accounts in order to turn over funds to Moody to invest on their behalf.
Moody also stole $10,000 from the Abiding Presence of God Church of Pennsylvania, according to court documents.
Doumar ordered Moody to pay full restitution and forfeit his North Chesterfield, Va., home, a Porsche 911 and about $1.5 million seized by the government.