Mooresville Man Pleads Guilty In $18.5 Million Ponzi Scheme
RALEIGH, NC – Shelby Dean Martin, 73, of Mooreville, NC pleaded guilty Thursday in Iredell County Superior Court to 19 felony counts of securities fraud following an investigation by the North Carolina Secretary of State’s Securities Division.
Senior Resident Superior Court Judge Christopher Collier sentenced Martin to two consecutive Class C felonies. Martin must serve between 9 years 8 months to just over 13 years in prison. Additionally, Judge Collier ordered Martin to repay victims approximately $5.35 million. After hearing his sentence, Martin was immediately taken into custody by the Iredell County Sheriff’s Department to begin serving his sentence.
The Secretary of State’s Office began receiving complaints in October of 2008 from North Carolina residents regarding investments they made with Martin individually or through one of his two businesses, D. Martin Enterprises and DM Ventures.
Between January 2004 and December 2008, Martin collected over $18.5 million from more than 100 investors. He told investors that their money would be used as venture capital for various companies, although many victims told investigators that Martin never told them specifically which companies he was investing in. All of the victims were told that their principal and interest were guaranteed and that they could get their money back at any time upon a 30-day notice. Martin issued promissory notes and receipts of funds to each of the victims, which detailed the guarantees the defendant promised to the victims. The victims were all guaranteed a rate of return between 10-50% per year on their principal investment.
However, Martin’s own bank records revealed that he used new investor money to pay returns to previous investors, the hallmark of a classic Ponzi scheme. Many of the victims knew Martin from church or other social circles.
“Sadly, we are seeing more fraudulent securities schemes in this challenging economy,” Secretary of State Elaine F. Marshall said Friday. “So it’s more important than ever for investors to be hyper-vigilant when they’re approached with investment opportunities. Mr. Martin was not registered to sell securities, so in this case a phone call to our Securities Division would have raised a very big red flag for any potential investor. That is why it is so very important that anyone considering an investment first call our Securities Division at 1-800-688-4507 to make sure that the person offering the investment, and the investment itself, are properly registered with us.”
The prosecution of this case was handled by Zesely Haislip, Senior Enforcement Attorney, and Dena King, Enforcement Attorney with the Secretary of State’s Securities Division. The Secretary of State’s Office gratefully acknowledges the assistance of Sarah Kirkman, District Attorney for Prosecutorial District 22A, and her staff as well as the staff of the Iredell County Clerk of Court’s office.
To find out if a broker, adviser, or investment offering is registered with the State, call the N.C. Secretary of State Securities Division at 1-800-688-4507.
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