Ex-Harnett teacher pleads guilty to stock-trading scheme
Posted July 26, 2010 3:31 p.m. EDT
Raleigh, N.C. — A former Harnett County teacher has pleaded guilty to mail fraud in a scheme to lure investors into fraudulent day-trading of stocks, authorities said Monday.
Ronnie D. Rainey, 43, who now lives in Oklahoma, pleaded guilty on July 20 in federal court in Raleigh. He will be sentenced in November.
Authorities said Rainey solicited people to invest their money with him from 2003 until 2005 through four companies that he created: Par 5 Investors LLC, Birdie Investors LLC, Eagle Investors LLC and Double Eagle Investors LLC. He was never registered to sell securities in North Carolina.
Rainey created multiple accounts with E*Trade and Ameritrade and drew in investors with claims that they would get monthly returns of 10 percent, authorities said. He is accused of defrauding 60 investors, including 12 from North Carolina, of nearly $3 million.
When Rainey’s investments began losing money, he manufactured false monthly and quarterly statements for investors, indicating their investments were turning a profit, authorities said. Investigators allege Rainey shuffled funds between accounts and converted much of investors’ money to his personal use.
He moved from Harnett County to Las Vegas in late 2003 and then to Oklahoma in 2007.
The case was investigated by the Securities Division of the North Carolina Secretary of State's Office.