Four Businessmen Sentenced to Prison for Involvement in Massive Fraud Scheme

Four Businessmen Sentenced to Prison for Involvement in Massive Fraud Scheme

HALLANDALE BEACH, Fla. — Four businessmen have been collectively sentenced to a total of 152 months in prison for their involvement in a large-scale fraud scheme.

The U.S. Attorney’s Office has now indicted the ex-chairman, Carl R. Ruderman, 81, for orchestrating the entire fraudulent operation at 1 Global Capital LLC, also known as “1 Global,” which affected over 3,400 investors in 42 different states.

Previously, four co-conspirators of Ruderman had pleaded guilty for their roles in the fraud:

  • Alan G. Heide, 65, former CFO of 1 Global, was sentenced to 60 months in prison and ordered to pay over $57 million in restitution.
  • Andrew Dale Ledbetter, 81, pleaded guilty to conspiracy to commit wire fraud and securities fraud, receiving a 60-month prison sentence and a restitution order of over $148 million.
  • Steven Allen Schwartz, 78, was sentenced to 24 months in prison and ordered to pay over $36 million in restitution.
  • Jan Douglas Atlas, 78, received an eight-month prison sentence and was ordered to pay over $29 million in restitution.

According to the indictment, 1 Global operated as a commercial lending business in Hallandale Beach, offering high-interest “payday” loans to small businesses, known as merchant cash advance loans (MCAs).

The indictment alleges that Ruderman and others involved made false and misleading representations to investors about 1 Global’s business profitability through marketing materials and account statements.

Investors were allegedly deceived into believing that 1 Global had audited financials by a public accounting firm, that their money would be invested in MCAs, and that they could expect high returns on their investments.

Ruderman is accused of misusing investors’ money for personal expenses, including credit card payments, vacations, insurance for his art collection and valuable jewelry, drivers, nannies, housekeepers, mortgage payments, tuition, and luxury cars driven by his wife.

He also allegedly funneled the investors’ funds to businesses benefiting himself and his family without their knowledge.

The indictment also states that Atlas, at Ruderman’s request, authored two opinion letters in 2016 containing false information that facilitated 1 Global’s illegal operations.

These letters omitted key aspects of the investment, such as automatic renewals, and targeted non-sophisticated investors, including IRA account holders. Ruderman and others at 1 Global relied on these letters to continue raising money illegally from investment advisors and investors.

Investigators reveal that 1 Global filed for bankruptcy on July 27, 2018. At that time, the company had more than 3,400 investors and had raised over $250 million during the course of the fraudulent scheme.

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