After a two-week trial, a federal jury convicted an Arizona father and son of orchestrating a $100 million Ponzi scheme that targeted members of the Church of Jesus Christ of Latter-day Saints. Guy Williams, 42, and Brent Williams, 66, were found guilty of thirty-eight felony charges, including conspiracy, wire fraud, mail fraud, and money laundering. Each could face hundreds of years in prison. Based on the severity of the scheme and the numerous charges, the duo could potentially face a sentence of hundreds of years in prison.
The Williamses operated a group of investment funds known as the "Mathon" entities, which offered several investment opportunities involving short-term loans to third-party borrowers. Beginning in November 2002, potential investors were promised high interest rates on the loans of up to 75% annually, and were told that the Williamses and their partners had substantial experience in this business. Investors were assured that each loan was collateralized with specific assets having a value much higher than the value of the loan, and were also told that many of the loans were also further secured by personal guarantees from the borrowers. Many of the investors were members of Arizona's Mormon community. From November 2002 until February 2004, the scheme took in more than $100 million from over 175 investors.
However, the Mathon entities were nothing more than an elaborate Ponzi scheme, using incoming investor funds to pay returns to existing investors as well as sustaining their lavish lifestyles. Investor funds were also used to pay over $10 million in salaries and bonuses to the founders, as well as to operate businesses they secretly controlled.
The Williamses are scheduled to be sentenced September 30.
A copy of the indictment is here.
For more news and analysis of Ponzi schemes, visit Ponzitracker, a blog by Jordan Maglich, an attorney at Wiand Guerra King P.L.
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