Claude McDougal Pleads Guilty to Fraud Charges After Defrauding Victims of Over $2.5 Million in Ponzi Scheme
Claude Darrell McDougal, formerly associated with Centaurus Financial, Inc. in Charlotte, North Carolina, pled guilty to securities fraud for orchestrating a Ponzi scheme that took over $2.5 million from investors.
The Peiffer Rosca securities practice attorneys Alan Rosca and Joe Peiffer are investigating the matter.
McDougal Led Investors to Purchase Notes Offered by Financial Alliance
McDougal encouraged over 25 investors, many of whom reside in the Charlotte area, to invest more than $2.5 million by promising his victims that their funds would be used to invest in promissory notes offered by US Financial Alliance Consultants, LLC, according to court documents and McDougal’s plea hearing. McDougal created Financial Alliance in 2005, but the company was never registered to act as a securities dealer in North Carolina or elsewhere.
McDougal encouraged his victims to invest with Financial Alliance by offering guaranteed fixed rate of returns between 6% and 15 % annually, according to court documents. McDougal allegedly invested only $580,000 of his victims’ money and used approximately $450,000 to make payments to some victims in the form of payouts from purported profits.
However, the money from these payments came from the funds of new investors, not profits, according to court documents.
McDougal Used Funds from Ponzi Scheme for to Support His Lavish Lifestyle
McDougal admitted in court that he used investors’ funds for personal expenses. He spent nearly $1.19 million of investors’ money to support his lavish lifestyle and spent the money on jewelry, electronics, dinners, furniture, hotel stays, and other business-related expenses.
The Peiffer Rosca securities attorneys often represent investors who lose money as a result of Ponzi schemes, investment fraud, or stockbroker misconduct. They are currently investigating the possibility of assisting victims with the recovery of their losses. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.
Investors who believe they lost money as a result of investment fraud or misconduct may contact the securities lawyers at Peiffer Rosca, Alan Rosca or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at 888-998-0520.
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