Three Defendants Charged with $345 Million Fraud Agree to Permanent Injunctions
Litigation Release No. 24593 / September 13, 2019
Securities and Exchange Commission v. Kevin B. Merrill, et al., Civil Action No. 18-cv-2844-RDB (D. Md. Filed September 13, 2018)
Washington D.C., Sept. 13, 2019 - The Securities and Exchange Commission today announced that three individuals previously charged in a $345 million offering fraud have agreed to permanent injunctions barring further fraudulent conduct.
According to the SEC's amended complaint, filed in federal district court in Baltimore, from at least 2013 to 2018, defendants Kevin B. Merrill, Jay B. Ledford, and Cameron R. Jezierski attracted over 230 investors to the scheme by making false statements to investors about how their money was being used and propped up their misstatements through the creation of sham entities and fraudulent documents. The complaint alleges that rather than use investor funds to acquire and service debt portfolios as promised, defendants used the money to make Ponzi-like payments to investors and to fund Merrill's and Ledford's extravagant lifestyles. In a parallel action, Merrill, Ledford, and Jezierski have pleaded guilty to criminal charges brought by the U.S. Attorney's Office for the District of Maryland.
The SEC's amended complaint charges Merrill, Ledford, and Jezierski with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5(a) and (c) thereunder. The amended complaint further charges Merrill and Ledford with violating Section 10(b) of the Exchange Act and Rule 10b-5(b) thereunder. Merrill, Ledford, and Jezierski agreed to bifurcated settlements, which the court has approved, that permanently enjoin them from future violations of these provisions of the federal securities laws. Under the terms of the settlement, disgorgement, prejudgment interest, and civil penalty will be determined by the court.
The SEC's continuing investigation is being conducted by Norman P. Ostrove, Dustin E. Ruta, and Scott A. Thompson of the SEC's Philadelphia Regional Office. The litigation is being led by Julia C. Green and Mark R. Sylvester and supervised by Jennifer Chun Barry. Kelly L. Gibson, Associate Regional Director, is supervising the action. The SEC appreciates the assistance of the U.S. Attorney's Office for the District of Maryland and the Baltimore field office of the Federal Bureau of Investigation.