A Virginia man and former pastor entered a guilty
plea to charges that he operated a Ponzi scheme under the guise of a
legitimate jewelry business. Matthew James Addy, 34, of Lancaster,
Pennsylvania, pled guilty to a single charge of securities fraud, which carries
a maximum sentence of up to twenty years in prison. His jewelry store,
LaPorte Jewelers, has since shut down.
After serving as a youth pastor in Scotland for several
years, Addy founded wholesaler Edward J. & Co, which also operated LaPorte
Jewelers ("LaPorte"). Beginning in 2010, Addy began seeking
investors for what he described as the purchase and resale of wholesale jewelry
and loose precious stones. In exchange for their investments, individuals
were given promissory notes carrying above-average rates of interest that
purportedly were linked to specific jewelry transactions entered into by Addy.
In seeking investors, Addy relied on his affiliations with various
religious organizations, and a majority of the 40-plus total investors were
recruited from these groups. In all, Addy raised more than $3 million.
However, according to the FBI and as admitted by Addy,
LaPorte was nothing more than a front for an elaborate Ponzi scheme that used
investor funds to make Ponzi-style payments and for a variety of other
unauthorized uses. When LaPorte originally closed down in June 2012, Addy
store's bad fortunes on mounting monthly losses due to declining revenues.
Addy is scheduled to be sentenced on May 10, 2013.
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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