(ABC) A Chesterfield man was sentenced Tuesday to 13 years in prison for running a Ponzi scheme for over 13 years at his Virginia Beach investment firm.
According to court documents, 47-year-old Edward Lee Moody was the sole owner and registered investment advisor at CM Capital Management LLC.
He solicited investors on the basis that he would invest their assets in securities on their behalf, and manage those investments on an ongoing basis. Instead, he ran a Ponzi scheme.
Moody was able to solicit and collected about $6.6 million from 55 investors. At least 13 of the investors were elderly people who liquidated assets from their existing, legitimate retirement accounts in order to provide funds to him, which they expected he would invest on their behalf.
Court documents said that in most cases, Moody did not manage the accounts of the investors, or buy or sell securities on their behalf. Usually, he didn't even open individual brokerage accounts.
Moody would instead divert the money for his own personal benefit. He used at least $1.4 million for business expenses, to purchase a home, make car loan payments, shop, and travel to Las Vegas and other destinations.
He also used about $885,000 to buy and sell securities for himself.
Moody was able to keep the scam up for so long because he used about $1.8 million that he received from new investors to make periodic lulling payments to earlier investors, and he provided investors with fraudulent monthly account statements that falsely indicated that the investors’ funds had been invested in securities and had earned returns.
In addition to the 13-year prison sentence, Moody was ordered to pay over $4.8 million in restitution to his victims.
