Lubbock Ponzi Schemers Face Up to 70 Years in Federal Prison Following Guilty Verdict in San Antonio

SAN ANTONIO - A federal jury convicted two Lubbock men in San Antonio Tuesday afternoon for their roles in a massive Ponzi fraud scheme with their already convicted co-defendant Brooklynn Chandler Willy of San Antonio, announced U.S. Attorney Justin R. Simmons for the Western District of Texas.

According to court documents and evidence presented at trial, Joshua Allen and Michael Cox jointly owned and controlled four investment companies: Ferrum Capital LLC, Ferrum II LLC, Ferrum III LLC, and Ferrum IV LLC. Allen, Cox, Willy and others acting at their direction, solicited victims to invest in these entities. Willy, who pleaded guilty to 10 counts in March, was the owner of Chandler Capital Holdings and Queen B Advisory LLC doing business as Texas Financial Advisory (TFA). Among other services, TFA purported to provide asset management and financial planning services.

Allen, Cox and Willy conspired to mislead the victims concerning the security of the investments and concealed their high commissions. Additionally, Allen and Cox lied about the nature of the investments. Hundreds of victims collectively lost millions of dollars. Much of that money went to pay earlier investor-victims, thereby concealing the scheme and attracting additional victims. Much of the money also directly benefited the co-conspirators themselves.

On Tuesday, concluding a weeklong trial presided over by U.S. District Judge Fred Biery, the jury convicted both Allen and Cox of all four counts: conspiracy to commit wire fraud, conspiracy to commit money laundering, conspiracy to launder monetary instruments, and securities fraud.

"In the midst of this Ponzi scheme, Allen and Cox collected a handsome fee by telling various egregious lies, even using their self-proclaimed faith and reputation in their community to con the investors they victimized," said U.S. Attorney Simmons. "This case shows that within the Western District of Texas and across the Department of Justice, we are resolved to prosecute cases like these where individuals have preyed on the innocence and trusting nature of everyday Americans as Michael Cox and Joshua Allen did here."

"This case took years to unravel: tracing the money, interviewing witnesses, and working with our FBI partners to find more victims of this despicable Ponzi scheme. Allen and Cox preyed on their closest friends, their community, and many others across the country. They took millions of dollars to enrich themselves while devastating lives along the way. To say they violated trust is grossly insufficient - they destroyed it," said Special Agent in Charge Christopher J. Altemus Jr. of IRS CI's Texas Field Office. "Our work with the FBI and the U.S. Attorney's Office cannot undo the victims' suffering, but this verdict may provide some measure of satisfaction that these criminals will pay for their financial crimes. The women and men of IRS-CI will continue to band together with their law enforcement partners to pursue those who commit financial crimes and steal from trusting individuals."

"These convictions send an important message," said FBI San Antonio Special Agent in Charge Daniel Faith. "When someone chooses greed over integrity and abuses the trust of others for illicit personal gain, there are serious consequences."

Now convicted on all four counts, Allen and Cox both face up to 70 years in prison. They were taken into federal custody immediately following the verdict. Their sentencing hearings have not been scheduled at this time.

Willy's sentencing hearing is scheduled for Dec. 14. She faces up to 20 years in prison on each of the six wire fraud charges, on the one wire fraud conspiracy charge, and on the one money laundering conspiracy charge. She also faces up to 10 years for engaging in monetary transactions in property derived from the wire fraud scheme and a mandatory minimum of two years in prison for aggravated identity theft, which, by statute, would run consecutive to any other punishment.

IRS-CI and the FBI investigated the case.

Assistant U.S. Attorneys Joe Blackwell and Sam Shapiro are prosecuting the case.

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