Defendant engaged in a six-year Ponzi scheme
NORFOLK, Va. - Joshua Ray Abernathy, 37, of Chesapeake, was sentenced today to 90 months in prison, followed by 3 years of supervised release for mail fraud and unlawful money transactions. The Court also ordered Abernathy to pay $1,181,755.08 in restitution to his victims and to forfeit all of the proceeds from his offense.
Abernathy pleaded guilty on March 13, 2015. According to court documents, Abernathy, a licensed broker and financial advisory, engaged in a six-year Ponzi scheme. Abernathy convinced his clients to transfer funds from legitimate IRA accounts to his company “Omega Investment Group." Abernathy claimed that he could invest the funds in “puts" and “calls" and reap fantastic returns. In reality, Abernathy invested only a tiny portion of the money in his personal E*Trade account and used the majority of the monies to fund his extravagant lifestyle including paying for living expenses, home furnishings, restaurants, sporting goods, electronics, clothing and entertainment. Abernathy also spent substantial investor funds for traveling including cruises, ski trips, vacations to Texas, Florida, Mexico, New York, and a three-month tour of England. Abernathy also spent over $250,000 of client monies renting luxury automobiles including a bright orange Lamborghini. After spending all of the client funds and with investors asking questions, Abernathy walked in to the FBI and confessed to running the Ponzi scheme.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; David M. McGinnis, Acting Postal Inspector in Charge of the U.S. Postal Inspection Service (USPIS) - Washington Division, Thomas Jankowski, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI); and John S. Adams, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after sentencing by U.S. District Judge Mark S. Davis.
This case was investigated by the Tidewater Complex Financial Crimes Task Force. Members of the Task Force include the U.S. Postal Inspection Service, the IRS Criminal Investigations Divisions, and the FBI’s Norfolk Field Office. Assistant U.S. Attorney Melissa O’Boyle is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15-cr-21.
Source: U.S. Department of Justice, Office of the United States Attorneys
