Tuesday, February 27, 2024

Guilty: Wilmington investment advisor admits to role in $7 million fraud scheme

WILMINGTON — Now facing up to 30 years in prison, a Wilmington man pleaded guilty to wire fraud and money laundering in court Thursday.

Shawn Good, registered representative and investment advisor for Morgan Stanley Smith Barney in Wilmington, executed a scheme to obtain money through investment fraud, commonly known as a Ponzi scheme, from 2012 to February 2022. 

“We are cracking down on fraudsters who scam unwitting investors,” U.S. Attorney Michael Easley said in a press release.  “This investment advisor breached the trust of at least a dozen clients, taking over $7 million — money he promised would go to low-risk investments — and used it to line his pockets, buying real estate, luxury cars, and vacations.  This decade-long scam has finally come to an end.”   

Instead of investing in land development or bonds, Good used the money for personal expenditures including his Wilmington residence; a condominium in Florida; luxury vehicles including a Mercedes Benz, a Porsche Boxster, a Tesla Model 3, an Alpha Romeo Stelvio, and a Lexus RX350; fine dining; and vacations to Paris, France; Cinca Terra, Italy; Jackson, Wyoming; Las Vegas, Nevada; and other destinations.  To lend credibility to the Ponzi scheme and to elude detection, Good also used a portion of investor funds to make payments to earlier investors, according to the release. 

Good solicited investments from business clients and others for purported real estate projects and tax-free municipal bonds, touting these opportunities as low-risk investments that would pay returns of between 6% and 10% over three- or six-month terms.

The advisor caused some clients to obtain a liquid asset line of credit (LAL) secured by their Morgan Stanley investment or retirement accounts. He then directed clients to transfer the LAL funds to their personal bank accounts and then wire the funds directly to Good’s personal bank account. Other victims paid Good by paper check and wire transfers using funds derived from sources other than Morgan Stanley accounts. 

“High yield investment fraud schemes are designed to appeal to people’s hope that ‘you can get something for nothing,’ often resulting in the total loss of the investment,” said Donald “Trey” Eakins, IRS Criminal Investigation Special Agent in Charge of the Charlotte field office. “Be assured that IRS Criminal Investigation, together with our partners at North Carolina State Bureau of Investigation (SBI) and the U.S. Attorney’s Office, will hold those who engage in similar behavior fully accountable.”

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