A man who passed himself off as an investment advisor has pleaded guilty to mail fraud over a decades-long Ponzi scheme that officials say bilked investors, including friends and family members, out of more than $4 million.
Charles Richard Burgess, 66, faces a maximum prison term of 20 years when he returns to federal court for sentencing Nov. 4, although he will likely receive a lighter sentence due to the plea agreement.
Todd Maybrown, an attorney representing Burgess, did not immediately respond to phone and email messages seeking for comment.
Burgess, of Vancouver, Wash., began convincing investors in the mid-90s to place money in an unregistered investment vehicle he called “the pool,” according to the Justice Department. Burgess was not licensed or registered as an advisor, but over 26 years convinced 64 people to invest $13.4 million in the fund.
The DoJ says Burgess targeted family members and friends “with whom he had a trusting relationship,” and never screened them for risk tolerance or offered any prospectus detailing the characteristics of the investment. Burgess assured them he would personally absorb any losses and only take a cut of the profits for himself, according to the DoJ.
Over time, the investments went south, and Burgess began falsifying statements reporting profits when investors were actually losing money. He began repaying early investors with funds from later victims of the scheme.
By the end of 2020, investors were owed $4.5 million in principal, and Burgess issued year-end statements describing the value of the collected accounts at more than $10.3 million. The actual assets in “the pool” had dwindled to $113,000.
“For more than two decades Mr. Burgess led his victims to believe that he was successfully investing their funds for retirement,” U.S. attorney Nick Brown said in a statement.
“But in fact, since at least 2013, the investment fund was insolvent and losing value, and Burgess was stealing investor funds to line his own pockets,” Brown said. “More than two dozen people have lost retirement savings because of Mr. Burgess’s fraud.”
The Justice Department described a gradually unraveling scheme where despite the insolvency of the fund, Burgess transferred $1.4 million of investors’ remaining funds into his personal account from 2014 to 2021.
The plea agreement orders Burgess to repay nearly $4.4 million to 32 victims of the Ponzi scheme. Prosecutors say they will recommend a prison sentence toward the low end of federal sentencing guidelines.
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