ATLANTA - Ephren Taylor II, and Wendy Connor have been sentenced in connection with the fraud scheme they perpetrated while officers at City Capital Corporation. The scheme victimized over 400 people who invested over $16 million.
“Taylor’s ‘Building Wealth’ tour accomplished exactly the opposite, victimizing hundreds of investors and leaving many of them financially ruined," said Acting U.S. Attorney John Horn. “At churches across the country he touted himself as a socially conscious investor, but his investment opportunities were nothing but a Ponzi scheme designed to build his own personal wealth. This sentencing brings a measure of justice to those who remain devastated by his actions."
“These defendants are habitual fraudsters and world-class manipulators," stated Special Agent in Charge Veronica Hyman-Pillot, IRS Criminal Investigation. “Taylor and Connor knew that the investments they were touting were based entirely on deception and lies, which were driven by their insatiable greed. Today, Taylor and Connor have to face the choices they have made and live with the consequences."
“This case demonstrates the wide-reaching effects of fraudulent investment schemes and their impact on innocent victims. The fact that Ephren Taylor took advantage of people during a time of reverence and trust is particularly heinous," said Reginald G. Moore, Special Agent in Charge of the United States Secret Service, Atlanta Field Office. “Today’s sentence should serve as a reminder that criminals will not get away with taking advantage of unsuspecting victims without bearing the consequences."
According to Acting U.S. Attorney Horn, the charges and other information presented in court: Taylor, the CEO of City Capital Corporation, directed a nationwide Ponzi scheme. All told, he defrauded over 400 victims and convinced them to invest over $16 million. From at least April 2009, when Wendy Connor joined City Capital, through October 2010, 278 victims were defrauded of over $5.8 million.
As part of the scheme, Taylor traveled around the country on a “Building Wealth Tour," where he gave wealth management seminars to church congregations and where he targeted the African American and Christian communities. During this tour, Taylor claimed to be a socially conscious investor and falsely claimed that 20% of profits were donated to charity. One of the churches on the “Building Wealth Tour" was the New Birth Missionary Baptist Church in Lithonia, Ga. While there, Taylor and Connor met potential investors to discuss possible investments. Over 80 individuals from Georgia lost more than $2 million because of Taylor’s scheme.
The investments pushed by Taylor and Connor included purchasing promissory notes, where the funds invested would be used to support small businesses, such as laundries, juice bars, and gas stations. Taylor and Connor falsely represented the revenues and returns for these businesses knowing that they were not profitable.
Taylor and Connor also pushed an investment in sweepstakes machines. Sweepstakes machines are computers loaded with various games that allow players to win cash prizes. City Capital published offering materials that falsely claimed the average sweepstakes machine would generate 300% investor returns. As part of the fraud scheme, Taylor and Connor also promised that the sweepstakes machine investments were 100% risk free.
Taylor and Connor knew that the investments he was touting were not profitable and that investors were not receiving actual returns from their investments.
As part of the scheme, Taylor and Connor encouraged investors to use self-directed IRAs to make their investments. Many victims transferred their retirement savings to trust companies that act as custodians for self-directed IRAs, expecting these funds to be used to fund the investments pushed by Taylor.
After victims funded their self-directed IRAs, Taylor and Connor directed the use of those funds. The money was not invested as promised, but rather was used to pay ongoing business expenses of City Capital, pay personal expenses for Taylor and Connor, and in some limited instances, to pay supposed returns to earlier investors.
In late 2010, the scheme collapsed and Taylor's victims lost virtually all of their investments.
Taylor, 32, of Overland Park, Kansas, was sentenced by United States District Judge William S. Duffey, Jr., to 19 years, seven months in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $15,590,752.81. Wendy Connor, 46, of Raleigh, North Carolina, was also sentenced by Judge Duffey to five years in prison, to be followed by three years of supervised release, the first eighteen months of which are home confinement, and ordered to pay restitution in the amount of $5,818,299.13. Taylor was convicted on these charges on October 8, 2014, after he pleaded guilty to conspiracy to commit wire fraud. Connor was convicted on these charges on October 8, 2014, after she pleaded guilty to the interstate transportation of money taken by fraud.
This case was investigated by the United States Secret Service and Internal Revenue Service Criminal Investigation with significant assistance from the United States Securities and Exchange Commission.
Assistant United States Attorney Christopher J. Huber prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Source: U.S. Department of Justice, Office of the United States Attorneys
