Murphy Anderson Client Blows Whistle on $28.6 million Ponzi Scheme; Crooked Investor to Serve Jail Time
United States Chief District Judge Richard W. Roberts sentenced Garfield M. Taylor to 13 years in prison and ordered him to pay 28.6 million dollars to defrauded investors for a Ponzi scheme he orchestrated.
According to an FBI press release and court records, Garfield Taylor's Ponzi scheme left charities and families in the Washington area with $25 million in losses. The United States alleged that during the course of this scheme, Taylor never used the trading strategy that he told investors that he would use. With the investments he did make during this period, Taylor either lost money or made minimal profits far below what was needed to pay the amounts he owed. The United States further alleged that the only way that Taylor was able to pay the substantial interest rates he was paying during this period was to use portions of the principal invested by new investors to pay amounts that were owed to earlier investors.
In 2010, Murphy Anderson, on behalf of a whistleblower, disclosed this fraud to the Securities and Exchange Commission (SEC). In parallel criminal and civil actions, the SEC and the Department of Justice prosecuted this case.
The SEC whistleblower program, enacted by the Dodd-Frank Act, rewards whistleblowers who come forward with allegations of fraud. SEC whistleblowers are allowed to disclose securities fraud confidentially and anonymously.