"Hedge Fund" Founders Plead Guilty To Federal Charges For $4 Million Ponzi Scheme

CHARLOTTE, North Carolina – May 1, 2022: Dena J. King, U.S. Attorney for the Western District of North Carolina, stated that the owners of a phony "hedge fund" appeared in court today and pled guilty to federal charges of organizing a $4 million Ponzi scheme. Brandon Alexander Teague, 26, of Belmont, N.C., pled guilty to securities fraud and Austin Delano

Page, 26, of Grover, N.C., pleaded guilty to wire fraud. The defendants' guilty pleas were accepted by US Magistrate Judge David C. Keesler.

U.S. Attorney King is joined in making Wednesday's announcement by North Carolina Secretary of State Elaine F. Marshall, Robert R. Wells, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Tommy D. Coke, Inspector in Charge of the Atlanta Division of the United States Postal Inspection Service (USPIS), which oversees Charlotte.

According to the filed plea and the plea hearings, Page and Teague engaged in an investment scam that deceived hundreds of individuals, some of whom were at or near retirement age, of more than $4 million between October 2020 and December 2021. According to court records, the defendants misled victims into believing that Page and Teague ran D&T Investment Group (D&T), a hedge fund based in Kings Mountain, N.C., that invested in a variety of securities, including stock in well-known firms like Apple. D&T was not a hedge fund, and it did not have any securities licenses or registrations, despite what victim investors were told. Page and Teague were both unlicensed to sell securities and lacked experience in the field. In fact, the defendants sold campers before executing the investment fraud.

According to court filings and admissions, Page and Teague forced investors to sign an investment contract with D&T, among other documents. These documents featured fraudulent information, such as the claim that D&T would guarantee 100 percent of the initial investment and that investors would get 70% of trading profits. In truth, the investors' money was not guaranteed, and the alleged "profits" were Ponzi-style transfers, in which the defendants utilized money from new investors to pay current investors. Page and Teague hid the fraud by sending monthly statements to victims that included phony trading winnings. Page generated bogus screenshots of several financial accounts that displayed inflated D&T account balances when certain investors and D&T workers began to question the legality of D&T's operations. Page, for example, constructed a fictitious snapshot of a D&T brokerage account with a value of more than $16,000,000, when the account actually had a balance of less than $7.00.

Despite what victims were told, their money was not typically invested in securities. A considerable percentage of the cash was used to pay extravagant salaries and other remuneration to D&T workers, including members of Page's family, in addition to making Ponzi payments to investors. Page, for example, paid numerous D&T workers annual salaries of more than $100,000 and also paid several employees thousands of dollars each to get the D&T corporate insignia tattooed on their bodies. The defendants additionally spent the money stolen from the victims on personal items such as apparel, jewelry, travel, luxury car rentals, and cash withdrawals.

The defendants proceeded to Italy on December 2, 2021, as the fraudulent scheme was coming to a conclusion. On the same day, Page informed D&T employees, who were unaware that the company was a hoax, that the company would be closed. On their voluntary return to the United States, both people were arrested on New Year's Eve at JFK Airport in New York.

Following the plea hearings, the defendants were freed on bond with home confinement and location tracking. Page admitted to one count of wire fraud, which carries a potential sentence of 20 years in prison and a fine of $250,000. Teague admitted to one count of securities fraud, which carries a potential sentence of five years in jail and a fine of $250,000. The defendants' sentencing date has yet to be determined.

Assistant U.S. Attorney Daniel Ryan of the U.S. Attorney’s Office in Charlotte, is in charge of the prosecution.

*Editor's Note: A criminal charge is an accusation, by law, a person accused of a crime is innocent until proven in a court of law.

Wnctimes by Marjorie Farrington

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