Local News

NC man accused of operating $7 million Ponzi scheme to fund 'lavish' lifestyle

The U.S. Securities and Exchange Commission on Thursday charged a North Carolina business consultant with fraud in connection to operating a $7 million Ponzi scheme, according to a news release.

Posted Updated
Court records filed away
By
Maggie Brown
, WRAL multiplatform producer
CHARLOTTE, N.C. — The U.S. Securities and Exchange Commission on Thursday charged a North Carolina business consultant with violating anti-fraud provisions by operating a $7 million Ponzi scheme, according to a news release.
The federal government alleges that at least 75 North Carolina residents were defrauded by Wynn Charlebois, from Charlotte.
The money gained by defrauding investors was used to pay his family's debts, mortgage payments, vacations and private school for his children, the SEC alleges in the complaint.

Charlebois' "lavish lifestyle [was] almost entirely dependent on obtaining new investor funds in order to stay afloat," according to the complaint.

He had marketed himself as a "self-made" investor and consultant since the early 2000s, the SEC said. He used his social capital and his network of co-workers from an investment bank where he previously worked to gain clients.

Charlebois had been defrauding investors as early as 2005, the SEC alleges. He was able to gain trust from people and convince investors to enter into loan agreements where the funds were used to supposedly going to be used to purchase shares in private companies, among other things.

The SEC said he also lied to investors, told them he worked for companies he didn't, and offered his services as a consultant.

In recent years, Charlebois "offered investors the opportunity to participate in investments in which profits would be earned through the exercise of stock options he purportedly holds."

A review of Charlebois' accounts by the SEC found that he was constantly recycling money between business and personal banks in an effort to keep average daily balances and maintain the appearance that his promises were being kept. Oftentimes, he would ask investors for cash advances in order to pay previous lenders, according to the complaint from the SEC.

When investors would question Charlebois about where their money was, he would blame the bank for delays or tell them he was busy, according to the SEC. He also falsified bank documents to make it appear investors had funds in their bank account.

According to the SEC filing, he used the money he gained from investors to also pay more than $121,000 for his child's private university in Dallas and another $65,000 to his child's private high school.

He also used the funds to pay for "lavish" family vacations and stays at the Ritz Carlton. The family spent nearly $9,000 during a week-long vacation in Boca Grande, Florida, despite Charlebois' checking account being in the negative, the filing says.

"The funds Charlebois received from investors were not invested as he said they would be, and he had no income stream from anything other than the money he received from new investors, loans from personal friends and merchant cash advance loans," the complaint alleges.

The SEC seeks to freeze Charlebois' assets ahead of his day in court.

Related Topics

 Credits 

Copyright 2024 by Capitol Broadcasting Company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.