Publicly available records published by the Department of Justice, as well as contemporaneous reporting by Financial Planning indicate that CM Capital Management’s Edward Moody Jr. has pleaded guilty to charges of mail fraud and “engaging in monetary transactions in criminally derived property” in connection to an alleged 13-year Ponzi scheme.
According to the news report, Mr. Moody, as owner and operator of the investment advisory CM Capital Management in Virginia Beach, Virginia, raised more than $6 million from 53 investors between April 2005 and June 2018. He allegedly did so “under the premise that he would profitably invest that money in securities on their behalf and manage those accounts on an ongoing basis,” when in fact he diverted their funds toward his own personal benefit. He allegedly used “at least $1.4 million” to fund business expenses, the purchase of a new home, automobile payments, various shopping expenditures, and travel to locations including Las Vegas. He reportedly also spent $885,000 toward the purchase and sale of securities “for his personal benefit.”
To sustain the scheme, according to Financial Planning, Mr. Moody occasionally made payments to earlier investors using funds provided by new investors, and reportedly fabricated account statements representing that his customers’ funds were invested in various securities and “earning favorable returns.” The report states that “at least 13” of his victims were elderly individuals “who liquidated assets from existing, legitimate retirement accounts in order to provide Moody with funds to invest for their benefit.”
Per Financial Planning, Mr. Moody founded CM Capital in June 1999. His SEC-maintained Investment Adviser Public Disclosure lists one previous firm, Strategic Solutions Center in Landover, Maryland, where he was employed from 2007 until 2010. Financial Planning states that he worked for two registered broker-dealers before he founded CM Capital.
According to the DOJ release, Mr. Moody will be sentenced on February 5, 2019, and could face a sentence as long as 20 years in prison for the mail fraud charge and 10 years for the charge of engaging in monetary transactions in criminally deprived property.