This post was written by Hannah Chanpong.
The U.S. Securities and Exchange Commission today charged the estate of Florida investment firm executive K. Wayne McLeod with running a Ponzi scheme that victimized an estimated 260 law enforcement agents.
McLeod reportedly raised at least $34 million since 1988 by luring active and retired government employees to invest in the "FEBG Bond Fund" with false promises of annual returns between eight and 10 percent. McLeod operated the fund through the Federal Employee Benefits Group, Inc.
According to the SEC's complaint, McLeod wrote to investors, "With all of the Ponzi Scams going on around the world I wanted to insure you that this account is 100% secured by US Gov't Securities and the principal is never touched until liquidated."
McLeod allegedly solicited his clients' investments through financial planning seminars that he presented to federal and state agencies across the country. He then used his investors' money to "pay himself" and for "lavish entertainment" and "promotional expenses to bolster his image." The SEC has frozen McLeod's assets and the assets of his firms, FEBG, Inc. and F&S Asset Management Group, Inc. FSAMG has approximately $43 million under management.
McLeod was found shot to death in his car in Jacksonville, Fla. Tuesday morning, four days after he sent an e-mail that notified his clients that he was closing the fund.