Two men face federal charges in connection with a multi-million dollar investment plan | USAO-WDNC

CHARLOTTE, NC — Two residents of Cornelius, North Carolina, face federal charges in connection with a multimillion-dollar investment scheme, U.S. Attorney for the Western District Dena J. King announced. from North Carolina. A federal grand jury this week returned an indictment against Marlin Hershey and Dana Bradley, both 52, charging them with conspiracy to commit mail and wire fraud, mail fraud, securities fraud and conspiracy to money laundering. The indictment was unsealed this morning after Hershey appeared in court.

North Carolina Secretary of State Elaine F. Marshall and Robert R. Wells, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, join U.S. Attorney King in making today’s announcement today.

According to the allegations in the indictment, from approximately 2009 to 2021, Hershey and Bradley instigated dozens of victims to invest millions of dollars in unregistered securities offerings promoted by the defendants through Performance Holdings and d other entities controlled by the defendants and others, including Performance Retire on Rentals, LLC, Distressed Lending Fund, LCC, Moteng Funding, LLC and Southeast Lot Acquisitions, LLC, among others.

The indictment alleges that investment documents that Hershey and Bradley provided to victimized investors in connection with these securities offerings contained false and/or misleading statements and failed to disclose material information. For example, the indictment alleges that the offering documents did not disclose that the defendants received commissions based on the amount of investments they sold, and often provided investors with offering documents. offers that represented the opposite – that no one would receive a commission in relation to the investments. In fact, according to the indictment, the defendants received commissions that typically amounted to 10% of an investor’s initial investment and often received an additional commission when an investor extended an investment. In this way, Hershey and Bradley were paid millions of dollars in undisclosed commissions on the sale of securities. In addition to the commissions, the indictment also alleges that the defendants received regular and undisclosed “management” fees from the various entities.

According to the indictment, as part of the scheme, Hershey and Bradley also failed to disclose other material information to investors, including negative information about the backgrounds of the defendants and the financial difficulties experienced by some of the defendants. entities for which they solicited investments. . On the contrary, because the defendants often solicited the same group of investors to invest in the different projects, the defendants took steps to conceal these financial difficulties by granting undisclosed loans to various entities so that they could, at in turn, make the required interest payments to investors. The indictment also alleges that Hershey and Bradley solicited new investors and, contrary to statements they made to investors, used new investors’ money to repay loans and previous investors. The defendants also allegedly sent periodic investment status reports to investors that did not contain material negative information.

According to the indictment, in 2019 investors learned that several of the projects they had invested in were in financial difficulty and could no longer meet their obligations to investors, which totaled several million dollars.

Hershey was released on bail after his court hearing. Bradley will first appear in court on Monday, April 25, 2022. The mail and wire fraud conspiracy charge and the mail fraud charge each carry a maximum prison sentence of 20 years and a fine of $250,000. The securities fraud charge carries a maximum prison sentence of 20 years and a fine of $5 million. And the maximum jail term for money laundering conspiracy is 10 years and a $500,000 fine.

The indictment also includes a Notice of Forfeiture, which provides notice that the defendants must confiscate to the United States all property implicated in the offenses charged in the indictment. The government will pursue a forfeiture judgment in the amount of at least $7.5 million which the government says is proceeds of the violations alleged in the indictment.

All counts in the indictment are allegations. Defendants are presumed innocent until proven guilty beyond a reasonable doubt in court.

In making today’s announcement, U.S. Attorney King thanked the North Carolina Secretary of State’s Securities Division and the FBI for conducting the joint investigation.

Assistant U.S. Attorneys Daniel Ryan and Graham Billings of the U.S. Attorney’s Office in Charlotte are in charge of the prosecutions.

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