The federal government has told a California federal judge that it reached an initial plea deal with investment manager Mark Feathers, who is charged with securities fraud for running a $42 million Ponzi scheme. The plea deal comes eight months after Feathers threatened those involved with the case and saw his bail revoked.
According to a federal grand jury indictment, Mark Feathers, the founder and CEO of Small Business Capital Corp. (“SBCC”), raised more than $50 million from more than 250 investors by promising profits from membership interests in mortgage loan investment funds. Feathers paid some returns to investors by using money that came from new investors—the hallmark of a Ponzi scheme.
Mark Feathers Faces Multiple Counts of Securities Fraud
Feathers faces 17 counts of securities fraud and 12 counts of mail fraud for the investment scheme. After his arrest, he pled not guilty in November 2014 and was released on $250,000 bond. The bond was revoked in March after Feathers sent an email to eight people involved with the case—including U.S. Securities and Exchange Commission attorneys, a court-appointed receiver and his former counsel—threatening violence to anyone who uses words at trial that suggest he was a thief. This past summer he unsuccessfully bid to be released from custody.
The indictment alleges that from 2009 to 2012, Feathers improperly transferred more than $6 million of investment funds to SBCC to pay its operating expenses. Additionally, he allegedly transferred eight mortgage loans from one fund to another, sold at an inflated price, and then took some of that money to pay approximately $570,000 in management fees to SBCC. Feathers used about $2 million dollars of investors’ money for his personal benefit.
Did You Lose Money Investing with Mark Feathers?
If you believe you have lost money investing with Mark Feathers or in any investment scheme, you may have certain legal rights that require your immediate attention.
Call an Investment Fraud Attorney Today
If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.