More than 40 people put over $23.6 million into what they believed was an exclusive investment opportunity capable of producing significant returns. Most lost their entire investment.
Stacy Allen Taylor, 59, of Shepherdsville, Kentucky, participated with others in an international scheme built around a supposed private trading platform, according to WAVE.
The investment promises brought in millions of dollars from victims, but the returns they expected never materialized. Taylor eventually pleaded guilty to all seven counts in his federal indictment, including conspiracy to commit wire fraud, wire fraud and conducting transactions involving more than $10,000 in criminal proceeds.
Now he is going back to federal prison. A judge sentenced Taylor to nine years behind bars on Aug. 11 and ordered him to pay restitution to victims of the scheme.
Investors Thought Their Money Was Going Into a Private Trading Platform
The scheme was presented as an investment opportunity involving a private trading platform that could generate substantial returns. The U.S. Attorney’s Office for the Western District of Kentucky said Taylor conspired with others as part of an international wire-fraud operation that ultimately took more than $23.6 million from over 40 victims.
Federal court records described the government’s allegation that Taylor and others persuaded victims to invest sums of approximately $1 million to $2 million that they believed would be traded in unusual ways on a limited-access trading platform.
Federal prosecutors said most of the victims lost their entire investment. The Justice Department’s sentencing announcement does not say Taylor personally retained all of that money.
Taylor Pleaded Guilty to All Seven Counts And Got 9 Years
Taylor did not take the case to trial. He pleaded guilty to all seven counts contained in his federal indictment. Those counts included conspiracy to commit wire fraud, two counts of wire fraud and four counts of engaging in monetary transactions involving more than $10,000 in criminally derived property.
The FBI Louisville Field Office and IRS Criminal Investigation’s Detroit Field Office investigated the case. Federal authorities said IRS-CI agents used their financial expertise to identify and trace funds connected to the fraud.
Taylor was sentenced on Aug. 11 to nine years in federal prison for his role in the investment scheme. He was also ordered to pay restitution to victims, although the Justice Department’s sentencing announcement did not disclose the restitution amount. There is no parole in the federal system.
This Was Not His First Federal Fraud Case
Taylor had already spent time in federal prison before the investment scheme brought him back before a judge. His earlier case involved an illegal online pharmacy that dispensed controlled prescription drugs without valid prescriptions.
Taylor pleaded guilty in 2014 to conspiracy to illegally distribute and dispense controlled substances, wire fraud and conspiracy to commit money laundering.
The Justice Department said the online operation generated $790,753.51 from the sale of controlled prescription drugs. Taylor ultimately served 45 months in federal prison in that case.
Federal prosecutors cited that criminal history when announcing his latest sentence, describing Taylor as a repeat offender whose fraud caused significant harm to dozens of victims.
How to Check a Supposed Exclusive Trading Opportunity Before Investing
Claims about exclusive, limited-access or unusually sophisticated trading programs deserve independent scrutiny before any money changes hands. The SEC’s Investor.gov identifies promises of high returns, pressure to invest quickly, suspicious payment instructions and unsolicited investment pitches as warning signs of possible fraud.
Investors should independently check both the person selling an investment and the investment itself. Investor.gov provides tools for researching an investment professional’s background and registration status, while the SEC’s PAUSE program identifies certain entities that falsely claim to be registered, licensed or located in the United States.
Before wiring a large sum, investors should understand what assets will actually be purchased, who will hold the money, whether the seller is properly registered and how the claimed returns are generated. A promoter who cannot provide independently verifiable answers to those questions or who discourages outside verification gives investors a reason to stop before sending funds. Suspected securities or investment fraud can be reported to the SEC through its investor complaint and tip channels.