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Business Crimes BulletinColumns & DepartmentsCriminal LawLitigationWhite Collar Crime

In the Courts

By Juliet Gunev

Maryland's Largest Ever Ponzi-Scheme: Kevin Merrill Sentenced to 22 Years in Prison for $396 Million Consumer Debt Fraud

On October 10, in the U.S. District Court for the District of Maryland, Kevin Merrill, 54, was sentenced to 22 years in federal prison following his guilty plea to charges of conspiracy and wire fraud in connection with a $396 million investment fraud scheme offering high returns on consumer debt products. He was ordered to pay at least $190 million in restitution by U.S. District Court Judge Richard D. Bennett, with the full amount of the victim's losses to be repaid still to be determined. An order of forfeiture was made, with the exact amount also still to be determined. Merrill's two co-conspirators and his wife have also plead guilty to charges relating to their roles in the scheme and subsequent obstruction of justice.

According to Merrill's plea agreement, the scheme, which operated from 2013 through September 2018, involved the use of fictitious sales agreements and other falsified documents, including quarterly reports and tax returns, provided by a co-conspirator Jay Ledford, 55, to induce investors to invest in consumer debt portfolios with Merrill's companies: Delmarva Capital and Global Credit Recovery. Merrill and Ledford, a certified accountant with offices in Texas, had been long term friends since meeting in 1999 before commencing the scheme in 2013. In the first year of the scheme, Merrill raised over $4 million from investors, far exceeding the $186,000 brought in by Ledford, at which point they agreed that Merrill would assume the "front man" sales role given his superior sales ability. Ledford continued to supply Merrill with the fictitious documents needed to lend credibility to the transactions, eventually bringing in a third co-conspirator in 2017, Cameron Jezierski, 28, to assist.

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