FBI, SEC Delve into Local Ponzi Scheme; VICTIMS the Fund Solicited Law Enforcement and Other Government Agents. DEATH McLeod Killed Himself Four Days after Leaving a Note Saying Fund Closed

By Harding, Abel | The Florida Times Union, June 26, 2010 | Go to article overview

FBI, SEC Delve into Local Ponzi Scheme; VICTIMS the Fund Solicited Law Enforcement and Other Government Agents. DEATH McLeod Killed Himself Four Days after Leaving a Note Saying Fund Closed


Harding, Abel, The Florida Times Union


Byline: ABEL HARDING

Jacksonville investment adviser Wayne McLeod ran a Ponzi scheme that raised at least $34 million from federal employees across the nation, authorities said.

The Securities Exchange Commission said McLeod used the millions to finance his lavish lifestyle, which included a $1 million home on Julington Creek, three condominiums in Amelia Island worth $900,000 and a 38-foot boat named "Top Dawg."

McLeod, 48, killed himself Tuesday in a Mandarin park, four days after telling investors the fund was closed and no more money would be paid out.

In a complaint filed Thursday, the SEC charged McLeod's firms with fraudulently soliciting investors for a government bond fund that never existed. He promised healthy returns to those who invested.

The SEC said more than 139 investors of the 260 they have found still had money invested in McLeod's bogus fund.

"McLeod victimized law enforcement agents and other government employees who dedicated their lives to the service of this country," Eric I. Bustillo, director of the SEC Miami Regional Office, said in a news release. "The victims gave years of public service, and McLeod stole their futures."

The SEC also froze the assets of McLeod's estate, his benefits consulting firm, Federal Employee Benefits Group Inc. (FEBG), and his registered investment adviser, F&S Asset Management Group Inc., on Friday.

Dozens of investors told the Times-Union they had been lured through seminars McLeod held at government agencies.

A review of FEBG's records show the company held 255 seminars since February 2006. The events were as diverse as a DEA in-service training in Virginia to an FBI workshop in Alaska.

The agency targeted most frequently by McLeod in recent years was U.S. Immigration and Customs Enforcement, which hosted 33 events in the last two years. Danielle Bennett, a public affairs officer with the agency, said McLeod was paid by the government to provide retirement planning services but was unable to say how much he received.

According to the FEBG website, McLeod employed former federal law enforcement officials, including his executive vice president John Eichelberger, a former assistant commissioner of U.S. Customs and Border Protection who retired in January 2004, and business consultant Robert Michelotti, former assistant special agent in charge of the Drug Enforcement Agency, Tampa division.

Michael Parra, a DEA agent from Arizona, was among the shocked investors who contacted the Times-Union.

Parra invested life insurance proceeds he received after the death of his wife with McLeod.

The money, Parra said, was meant to cover college expenses for his two sons. He declined to say how much he had invested.

"Not only did these boys lose their mom," Parra said, "but now I have to deal with finding out what happened to their money."

Though Parra's money is likely gone, another investor got her $500,000 out early after McLeod refused to detail the fees he was charging her.

Janice Teague said she met McLeod at a conference for the National Association of Post Masters of the United States nearly a decade ago.

"He was a bragger," said Teague, a retired postmaster in Florida. "He was always talking about how he managed money for congressmen and federal judges."

She found his investment advice troublesome almost from the outset. Teague said when she voiced concern about being able to withdraw an annuity by a certain time, McLeod told her if she didn't receive it in time, he would pay her out of another fund - a practice forbidden by regulators.

"I thank my lucky stars and the Lord above that I got away from that man," she said. …

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