A mega scam conducted by Hallandale Beach firm 1 Global Capital cost investors between $280 million and $322 million, depending on which guilty plea you read. Three other South Florida men, all in their mid to late 70s, can now say it cost them their freedom.
Former Fort Lauderdale attorney Andrew Ledbetter, 79, was sentenced to five years in prison and $148,976,248 in damages by U.S. District Judge Roy K. Altman on Friday plead guilty to one count of conspiracy to commit wire fraud and securities fraud. Ledbetter also deals with civil penalties and disgorgement by the Securities and Exchange Commission.
Former chief operating officer of 1 Global Capital, Steven Schwartz, 76, pleaded guilty in the same Fort Lauderdale federal court and received two years in prison and $36,362,392 in restitution in July.
Altman sentenced Jan Atlas to eight months in prison and $29 million in restitution on Aug. 20 after pleading guilty to securities fraud. Like Ledbetter, Atlas, 76, was a Fort Lauderdale attorney who obtained a disciplinary sanction — accepting to be thrown from the Florida bar in exchange for closing the bar’s disciplinary case — when his 1 Global-related actions led to it that the Florida Bar had filed charges .
Alan Heide, 1 Global’s Chief Financial Officer, who now works in the Residential Reentry Management office in Miami, is already beginning the transition from federal prison to freedom. Heide served part of his five-year sentence for Securities fraud conspiracy in Jesup, the federal penitentiary of Georgia.
In every statement of fact, an admission of facts with an admission of guilt, Carl Ruderman, CEO of 1 Global Capital, is referred to as “Individual No. 1” because he has not been convicted or criminally charged.
In federal civil court, the Securities and Exchange Commission obtained a judgment against Ruderman that included restitution of $32 million; a $15 million civil penalty; an additional $750,000 in cash; and half the equity of its five-bedroom, seven-bathroom, 9,600-square-foot tower suite condo at Aventura’s Bella Vista North.
The piles of cash and lies at 1 Global Capital
The concept behind 1 Global Capital could be described as “Amscot for small businesses” – short-term, high-interest loans, but instead of repayment on payday, repayments are made in automatic withdrawals from borrowers’ bank accounts. Investors would receive the principal and a portion of the interest.
But the 3,600 investors were not informed about gigantic commissions. 1 Global Paid Brokers and Intermediaries. Also not disclosed was how much Ruderman used the company as a private bank according to the actual offer statements.
But Ledbetter, who had raised $100 million from investors and made $3 million including commissions, knew. So also Schwartz, Heide and Atlas. When questions arose about whether 1 Global Capital investors were selling a security, everyone knew they needed legal protection.
“Ledbetter knew that if 1 Global’s investment offering were designated as a security, it would undermine 1 Global’s ability to raise capital from investors and continue to operate without significant additional costs and reporting requirements,” reads its admission of fact . “It would also undermine the ability of Individual #1 and others, including Ledbetter, to profit from 1 Global’s operations in the form of fees, commission payments or other financial transfers.”
When the first attorney hired by 1 Global verbally expressed his opinion that the company offered a security and did not dissent, “Person #1 got angry and demanded his money back from Attorney #1, stating that that he intended to pay to get the answer he wanted from Attorney #1, not the answer he got.”
So Atlas provided the legal lie with a statement letter dated May 17, 2016, stating that 1 Global was not offering a security.
His admission reads: “[Atlas] was aware at the time of this writing that various aspects of the actual workings of the 1 Global investment had been omitted or inaccurately described in the letter and this was done intentionally to achieve the opinion desired by Person #1.”
This story was originally published Aug 30, 2021 2:12 p.m.