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Michigan Man Sentenced for $40M Ponzi Scheme and Swindling NYC Real Estate Company

Franklin Ray, a 52-year-old man from Canton, Michigan, was sentenced last week for his involvement in multiple frauds, including a $40 million Ponzi scheme and defrauding a New York City-based real estate company out of $175,000. U.S. District Judge Analisa Torres sentenced Ray to 212 months in prison, according to a press release by the U.S. Department of Justice.

Ray’s Deception and Fraudulent Activities

Ray pleaded guilty to four counts of wire fraud and one count of aggravated identity theft, admitting to his involvement in multiple fraudulent activities. He deceived a New York City-based real estate company into paying $175,000 in startup costs for a non-existent joint venture. Ray misled the company about his business experience and his company’s operations, using the funds for personal expenses, including private airplane trips.

The largest scheme orchestrated by Ray was a $40 million Ponzi scheme, known as the “Truck Investment Scheme.” This scheme targeted investors for his trucking and logistics company, CSA Business Solutions LLC. Under false pretenses, Ray promised investors significant returns on trucks supposedly offering delivery services for multinational e-commerce and shipping companies.

In reality, CSA Business Solutions operated only a few trucks and generated minimal revenues from trucking. Ray falsified spreadsheets to deceive approximately 275 investors into contributing at least $40 million, falsely claiming the purchase of over 2,000 trucks.

COVID-19-Related Fraud and Consequences

Ray also pled guilty to COVID-19-related fraud, securing over $1.9 million in government-guaranteed loans intended to aid small businesses during the pandemic. These schemes involved CSA Business Solutions and another Michigan-based trucking company. Ray submitted fabricated information and forged documents to the Small Business Administration and lenders, falsely portraying substantial trucking business activities.

Despite his arrest in March 2022 and the subsequent seizure of a CSA Business Solutions bank account, Ray continued operating the Truck Investment Scheme. He concealed his arrest and the fund seizure from investors and opened new bank accounts, defrauding investors of an additional $1.9 million during this post-arrest period.

In addition to the 212-month prison sentence, Ray faces five years of supervised release, forfeiture of $42 million (including a 1968 Chevy Camaro), and restitution to be determined. Ray had a previous conviction for bank fraud and wire fraud in the Eastern District of Michigan, serving a two-year sentence and being released in 2010.

Orginal article: Link To Article – provided by Kansas City Realtors