(Phoenix, Ariz. – Dec. 21, 2009) Attorney General Terry Goddard today announced that Charles Bruce Ferguson, 41, of Scottsdale, has been sentenced to five years in prison, followed by seven years probation and restitution of $3,105,000, for operating elaborate investment schemes that defrauded at least 42 people of more than $3 million since 2005.
Ferguson was indicted in November 2008 and again in January 2009. In November 2009, he pleaded guilty to two counts of theft, a Class 2 felony.
In 2005 and 2006, Ferguson solicited seven individuals to invest amounts ranging from $5,000 to $50,000 in a project to purchase a Mesa apartment complex and convert it into condominium units which would then be sold. Ferguson raised only $165,000, a small fraction of the amount required to purchase the apartment complex. About $100,000 of that amount was expended on fees and other costs associated with holding the monies in escrow.
Court documents state that Ferguson did not disclose to investors that such a loss was possible. Documents also describe that, at the time the project fell through, Ferguson made numerous verbal and written misrepresentations to investors to cover up these losses, including falsifying documents that purported to be from Washington Mutual Bank and the City of Mesa. Victims did not receive any of the promised returns, and most lost their principle investment as well.
Ferguson also perpetrated a second elaborate scam from 2006 to 2008. According to investigators, he solicited investments to purchase multi-million-dollar bank instruments, such as certificates of deposit or lines of credit. Investors were instructed to wire money under an agreement that the funds would be held as collateral in an account until the investment paid out over the course of several months.
Ferguson, however, altered the investment agreements without investors’ consent to allow him immediate access to the funds. When the time came for the investment to begin paying out, Ferguson again covered up the true reasons for failing to provide returns to investors as he had promised. Investigators never found evidence that the instruments were ever actually purchased.
Numerous victims invested money in this supposed high-yield investment program after learning about the investment opportunity through Craigslist. They were promised returns of up to $800 million over a short period of time. In some cases, Ferguson also promised that the investments would be used to fund global humanitarian efforts that paid a high rate of return.
Ferguson, who was not licensed to sell securities, used the victims’ money to purchase a Scottsdale condominium, luxury car, over $150,000 in high-end jewelry, at least $30,000 in tickets for luxury seats at local sporting events and $30,000 on private jet rental fees. Another $100,000 was traced to an alleged offshore tax haven. Forfeiture of these assets is pending.
Assistant Attorney General Todd Lawson prosecuted this case in Maricopa County Superior Court.
If you believe you have been a victim of fraud, please contact the Attorney General's Office in Phoenix at 602.542.5763, in Tucson at 520.628.6504 or outside the Phoenix and Tucson metro areas at 1.800.352.8431. To file a complaint in person, the Attorney General’s Office has satellite offices throughout the state with volunteers available to help. Locations and hours of operation are posted on the Attorney General’s Web site. Consumers can also file complaints online by visiting the Attorney General's Web site at www.azag.gov.