Federal Judge Sentences Jacksonville Ponzi Scheme Operator Who Defrauded Retired Teachers
On June 12, a federal judge in Jacksonville sentenced the former operator of a Ponzi scheme to 10 years in prison. Anderson Scott Hall previously pleaded guilty to four felony charges of wire fraud, mail fraud and money laundering in late 2013. The United States Attorney’s Office in Jacksonville recommended the 10-year sentence, which was only half of the maximum penalty of 20 years for each charge.
The Florida Division of Insurance Fraud and the Federal Bureau of Investigation uncovered Hall’s Ponzi scheme in late 2012. Hall used an offshore shell company, Abaco Securities International, to defraud investors. Hall was registered as a financial adviser with the State of Florida. He used his position as an independent agent for other companies to lure his victims—primarily Duval County teachers and administrators—into investing their retirement savings with Abaco. According to the Florida Times-Union, one retired schoolteacher invested $300,000, her entire retirement account, with Hall. She believed Hall’s promise of returns upwards of 12%. After losing everything in the Ponzi scheme, the Times-Union reported, the teacher must now work a minimum wage teaching job just to make ends meet.
Once investors transferred their retirement savings to Abaco, according to federal prosecutors, the money went straight into Hall’s personal bank accounts. In order to perpetuate the illusion of investing, Hall made some payments to earlier investors, but this was nothing more than using funds from new investors to cover his tracks. Abaco was never a legitimate business.
Altogether, prosecutors discovered more than 50 victims of the Abaco fraud, who collectively lost more than $4 million. Although most of the victims resided in Jacksonville, prosecutors said individuals as far away as Ohio lost money. A brokerage that employed Hall has made restitution to some of the victims, but many others may receive nothing, especially as Hall will now spend a decade in prison and cannot earn additional income.
The FBI arrested Hall in January 2013. The U.S. Attorney’s Office initially indicted Hall on 20 counts. Shortly before trial, Hall agreed to plead guilty to four counts, with prosecutors dropping the remaining charges. Hall has been in prison since his initial arrest.
This past March, several of Hall’s victims testified before U.S. District Judge Timothy Corrigan. One man testified Hall initially approached him at his wife’s funeral, convincing him to invest the proceeds from his wife’s life insurance policy with Abaco. He ultimately lost $300,000. Judge Corrigan cited the man’s testimony, together with that of the other victims, in imposing the 10-year sentence. Hall’s attorneys unsuccessfully argued for leniency.
Look Out for the Warning Signs
A case like this serves as a chilling reminder of how easy it can be to fall for a Ponzi scheme. Retirees and the elderly are especially vulnerable to con men like Hall. But there were a number of warning signs. First, Hall’s promise of high returns with little risk should make any potential investor skeptical. Second, his solicitation of victims at inappropriate times—i.e., a funeral—indicate an effort to pressure emotionally vulnerable individuals into making poor decisions. Finally, Hall’s use of an offshore shell company should have raised an alarm.
If you or someone you know has been the victim of a scheme like the one discussed above, it is important to seek out independent legal advice from an experienced Florida securities fraud attorney. Contact Gregory Tendrich, P.A., in Boca Raton to speak with someone right away.