A Michigan man pleaded guilty to four counts of wire fraud and one count of aggravated identity theft in connection with his operation of trucking companies.
Franklin Ray, operator of CSA Business Solutions LLC and another trucking company, pleaded guilty to four counts of wire fraud, including one count of wire fraud while released under bail, in addition to the aggravated identity theft, according to a March 28 news release.
“As he admitted in court today, between June 2020 and April 2022, Franklin Ray engaged in four separate fraudulent schemes by lying about the business operations of his purported trucking companies, including two separate PPP frauds and a $40 million Ponzi scheme," U.S. Attorney Damian Williams said in the release. "Ray continued his crime spree even after he was arrested by federal authorities in March 2022, brazenly defrauding investors in his fake trucking company of nearly $2 million while he was on bail following his arrest. Thanks to the hard work of the FBI and this office, he is being held accountable for his serial fraudulent conduct.”
Ray was previously convicted of wire fraud and bank fraud in the Eastern District of Michigan and was released from prison in 2010, the release reported.
Ray started marketing his transportation and logistics business, CSA Business Solutions LLC, to potential investors starting in June 2021, according to the release. During this, he and the investors agreed to agreements under which, for every $20,000 an investor contributed, CSA Business Solutions LLC would purchase and operate a truck in its trucking operation.
At that time, Ray informed investors they would get 77% of the trucks' net income, and the trucks would execute delivery services for a global e-commerce corporation and/or a global shipping company, the release reported.
Despite this, while, CSA Business Solutions LLC operated a small number of trucks and generated little money from trucking operations, payments were instead made to truck investment scheme investors from additional investments or from other sources, the release said. Additionally, Ray delivered the investors fabricated spreadsheets at regular intervals indicating the performance of their trucks.
He eventually persuaded more than 275 investors to put down at least $40 million, and he falsely claimed to have bought almost 2,000 trucks with the money, the release reported
The counts of wire fraud while released under conditions of bail and wire fraud affecting a financial institution each carry a maximum sentence of 30 years in prison, while the remaining count of wire fraud carries a maximum sentence of 20 years in prison, according to the release.
"Aggravated identity theft carries an additional mandatory two-year sentence, which must be imposed consecutively to any other sentence," the Department of Justice said in the release.
Ray also agreed to forfeit $42,128,912, including the funds on deposit at several bank accounts used in connection with the fraudulent schemes, including the primary CSA Business Solutions bank account, as well as the completion of restitution payments to the victim, the release reported.
