Edward May, founder of E-M Management Co. LLC (E-M), pled guilty last week
to a ten-year, $35 million
Ponzi scheme ("Edward May pleads guilty to operating Ponzi scheme that bilked investors
out of $35 million," Crain's Detroit Business, April 29, 2011). Investors defrauded
in the investment scheme resided in states throughout the country, including:
Michigan, California, Florida, Illinois, New York, Ohio and New Jersey.
According to the article, May - through E-M - solicited investments in
his LLCs by claiming that the companies held telecommunications contracts
with several major hotel chains. The contracts supposedly guaranteed income
of $30,000 - $100,000 per month to each company. Unfortunately for investors,
the contracts never existed, and investments in the company were used
to make Ponzi-style payments to previous investors.
May was indicted in October of 2009 on 59 felony counts of mail fraud.
Two years before the indictment, in 2007, the SEC filed a
complaint against May. In the complaint, the SEC alleged that May, through E-M,
solicited as much as $250 million in a fraudulent investment scheme. May
was also accused of making false promises to investors, which included
a "guarantee" that they would receive, at a minimum, returns
paid in monthly payments for the first 20 to 24 months after the initial
investment was made. On January 7, 2010, a U.S. District Court judge issued
a final judgment against May, which included an order to pay $37 million
May's plea confessed to all 59 counts of fraud. He is scheduled to
be sentenced on August 11