A recent investment fraud scheme involving a former Philadelphia linebacker
and a Virginia businessman cheated Virginia investors out of $10 million
in retirement and investment funds. The fraudsters used the retirement
savings of many elderly investors to purchase luxury homes, vehicles and
vacations, leaving investors with huge financial losses. Many investors
lost their homes and had to file for bankruptcy.
Investment Fraud Costs Investors Millions
The two main fraudsters in this
investment fraud scheme are two Virginia businessmen, Merrill Robertson and Sherman Carl Vaughn,
Jr. In 2010, the two men formed a company, Cavalier Union Investments
that offered a variety of investment opportunities in real estate, restaurants,
and alternative energy resources. The firm catered to many senior IRA
account holders who invested a large portion of their retirement income
and savings in various investments.
Merrill Robertson is a former Philadelphia Eagles linebacker who formed
an investment company with Vaughn after his football career ended. Robertson
had previously worked for Merrill Lynch. Vaughn was never licensed as
a broker at all. Shortly after Cavalier Union Investments was formed,
the company became insolvent and the two men developed the
Ponzi scheme that took cash from new investors to pay back previous investors.
The scheme worked for a while, until investors started to complain and
the SEC and federal law enforcement launched an investigation. As a result,
the two men were arrested and convicted of investment fraud. Merrill Robertson
was sentenced to 40 years in prison and Vaughn was sentenced to 12 years.
The two men were ordered to pay back approximately $9 million in restitution
to their 60 victims who suffered financial damages.
Many investors who were defrauded assumed they were transferring tax-deferred
retirement savings accounts to other types of tax-deferred accounts, but
Cavalier was never registered to handle these types of accounts. Cavalier
accepted investors' checks and deposited them into business accounts,
rather than customer investment accounts.
Both Robertson and Vaughn took big commissions off the top and used the
money for personal gain. Investor funds were used for the men's personal
expenses for house payments, car payments, school tuition, expensive jewelry
and clothing, private planes, luxury vacations, and private retreats.
They even donated a portion of their victims' funds to a Robertson
family charity. If you are the victim of investment fraud,
contact the law offices of Meyer Wilson at 888-390-6391 for a free consultation.