October 20, 2020
Update: On September 30, 2020, the Securities and Exchange Commission (SEC) charged New York City resident Michael Staisil with helping Kevin Merrill raise approximately $75 million in the Merrill-Ledford Ponzi scheme.
According to the SEC Complaint, Merrill was criminally charged by the U.S. Attorney’s Office for the District of Maryland for his misconduct related to the Merrill-Ledford Scheme, which raised a total of $345 million from over 230 investors for purported debt portfolios offered by Global Credit Recovery. At least $87 million of investor funds were misappropriated for personal use and approximately $213 million was used to make Ponzi-like payments to investors to maintain the scheme.
Staisil allegedly acted as an unregistered broker and actively recruited investors for Merrill and Global Credit Recovery. Throughout this recruitment process, Staisil allegedly made material misrepresentations and omissions to investors, including how much money Global Credit Recovery had made and false representations of his own wealth and investments. The SEC states in the Complaint that Staisil was compensated $400,000 for his efforts.
The SEC Complaint charges Staisil with violating the antifraud provisions of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934. The SEC seeks a permanent injunction, disgorgement with prejudgment interest, and a civil penalty. Kevin Merrill pled guilty to wire fraud and conspiracy to commit wire fraud. He was sentenced to 22 years in prison. Another perpetrator in this scheme, Jay Ledford, pled guilty to conspiracy to commit wire fraud, aggravated identity theft, and engaging in money laundering transaction over $10,000. Ledford was sentenced to 14 years in prison.
March 25, 2020: The Securities and Exchange Commission recently filed a subpoena enforcement action against New York City resident Michael Staisil, seeking an order directing him to comply with an investigative subpoena for testimony.
In September 2018, the SEC filed an emergency action in a federal court in Baltimore, Maryland against Kevin Merrill, Jay Ledford, Cameron Jezierski, and several entities owned or controlled by Merrill or Ledford including Global Credit Recovery, LLC, Delmarva Capital, LLC, Rhino Capital Holdings, LLC, Rhino Capital Group, LLC, DeVille Asset Management LTD, and Riverwalk Financial Corporation, to stop this alleged Ponzi-like scheme that raised over $354 million from more than 230 investors across the country. The SEC claims that those involved with this scheme allegedly promised investors significant profits from the purchase and resale of consumer debt portfolios. However, the alleged scammers were using fabricated documents, forging signatures, and using false information to entice investors and perpetuate the fraud. The SEC claims that Merrill and Ledford not only used new investment funds to pay earlier investors, but they also stole $85 million of the investor funds to maintain their luxurious lifestyles.
In the SEC’s ongoing investigation, Staisil was identified as one individual who may have worked on behalf of Merrill in this scheme. In July 2019 and November 2019, the SEC issued a subpoena to Staisil requiring him to appear for testimony. Staisil ignored both subpoenas.
The SEC’s application seeks an ordering requiring Staisil to fully comply with the subpoena, as the SEC continues its investigation to conclude if anyone has violated the law outside of those who have already been charged.