A California man wanted by the FBI for his part in an alleged $35 million Ponzi scheme tried to outrun the authorities on Monday by diving underwater using a small, submersible device, according to federal investigators.
Matthew M. Piercey is not a registered broker or investment adviser, according to industry websites run by the Financial Industry Regulatory Authority Inc. and the Securities and Exchange Commission.
But he certainly appeared to be playing the part and “offered financial advice” as part of his alleged scheme, according to the Feds. He was charged last Thursday with wire fraud, mail fraud and witness tampering in U.S. District Court for the Eastern District of California.
Piercey could not be reached for comment and a call to his firm Family Wealth Legacy, based in El Dorado Hills, California, could not be completed.
On Monday, the FBI in Redding, California, allegedly tried to arrest him, but Piercey led them on a chase that culminated with his plunge into a local reservoir. According to a court document, he “attempted to flee from arresting agents and was only arrested after a highway chase and approximately 25 minutes spent in Lake Shasta with an underwater submersible device.”
Piercey “led law enforcement on a vehicle chase that went off-road twice in residential neighborhoods including next to an apartment complex, and then later onto Interstate 5 northbound,” according to the memo from the U.S. Attorney’s office. “Law enforcement tracked Piercey’s vehicle from the air during the chase. Then, Piercey abandoned his truck near the edge of Lake Shasta, pulled something out of it, and swam into Lake Shasta.”
“Piercey spent some time out of sight underwater where law enforcement could only see bubbles,” according to the memo. “He remained in the frigid water for approximately 25 minutes. When Piercey finally emerged from the lake, law enforcement discovered that he had a Yamaha 350LI underwater submersible device.”
Claiming an investment strategy based on algorithms and cryptocurrency mining, Piercey often used investor funds to pay personal and business expenses, according to the U.S. Attorney’s office, and his companies fell short of generating the revenues to cover overhead and expenses while still paying investors the returns they were promised or were led to expect.
“Piercey entered a pattern of paying old investors lulling payments with new investor funds, while making various false and misleading statements, half-truths, and omissions to raise new money and to hide the constant downward financial spiral,” according to the memo.
ON THE LAM
This is the second adviser in recent months who has fled while under investigation by government authorities. During times of financial stress, such as the current COVID-19 pandemic or the financial crisis of 2008, fraudulent schemes by so-called financial advisers may be exposed because clients want access to their money and discover it’s not there.
The FBI last month charged a missing Atlanta financial adviser, who went on the lam in September, ahead of an investigation with the Securities and Exchange Commission, with one count of mail fraud. That adviser, Christopher W. Burns, raised a total of $10 million from clients and accelerated his purported fraudulent scheme in the days before disappearing near the end of September, according to a new lawsuit by the Securities and Exchange Commission.
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