Virginia Beach investment firm accused of operating Ponzi scheme

Posted at 11:59 AM, Aug 16, 2018
and last updated 2018-08-16 11:59:20-04

VIRGINIA BEACH, Va. – Edward Lee Moody, Jr. and the investment adviser firm he owns, CM Capital Management, are accused of running a Ponzi scheme and defrauding dozens of investors.

Court documents state that from October 2009 to the time of the complaint, Moody and his firm raised approximately $4.95 million from approximately 60 individuals and entities for investment purposes. However, according to the documents, the money was not invested properly, instead being used for personal use and to pay off earlier investors.

Moody and his firm would then provide false account statements to clients, purporting to show that the clients’ funds had been profitably invested while in actuality their assets were dissipated or sitting in bank accounts controlled by Moody.

According to court documents, Moody used the $4.95 million in investor funds to keep the Ponzi scheme operating, investing none of it on behalf of the investors.

To maintain the appearance of a legitimate, profitable investment advisory business, CM Capital used $1.4 million of the initial $4.95 million to pay off other, earlier investors.

Moody also used $1.84 million on personal expenses such as a house, car loan payments, restaurants, travel and shopping. He invested some of it in an account at TradeStation Securities, Inc., in the name of another company he operated, G.E. Holdings Corporation, and listed himself as the only beneficiary.

The rest of the money remained uninvested in accounts that Moody controlled.

Withdrawals from other accounts, often in amounts as small as $1,000 at a time, suggest that Moody was diverting investor assets as far back as 2009. Moody allegedly used G.E. Holdings Corporation to receive and transfer investor assets as well as hold investor funds.

According to court documents, Moody and CM Capital have obtained more than $1.1 million from investors in 2018 alone, including more than $1 million from a single investor in February.