Claude Darrell McDougal was sentenced to 78 months in prison after pleading
guilty to orchestrating a Ponzi scheme that defrauded more than 25 investors
out of approximately $2.5 million.
According to court documents, McDougal solicited investments in the form
of promissory notes through something called “US Financial Alliance
Consultants, LLC,” a company that McDougal created in 2005. It was
alleged that the promissory notes issued by the company were not properly
registered to be sold in any state, and McDougal was not registered to
In order to induce investors, McDougal was accused of promisingthat investors
would receive guaranteed fixed rates of returns on their investment between
6-15% each year.
The complaint explained that many of McDougal’s victims were elderly,
and some of them lost their entire life savings investing in McDougal’s
Instead of investing the money as promised, McDougal used some of the money
to issue “payouts” to other investors and used about $1.19
million to fund a lavish lifestyle, including dinners, jewelry, and hotels,
among other things.
For more information on how you can guard against Ponzi schemes or scams
targeting the elderly, visit some of our helpful resources: