Federal prison sentence and $36 million fine for Delray Beach resident in Global Capital fraud
Delray Beach, Florida – In the latest development of a sprawling financial scandal linked to Global Capital, LLC, Steven Schwartz, a resident of Delray Beach, will be serving a two-year term in federal prison and is obliged to pay restitution amounting to $36 million. The United States Department of Justice (USDOJ) has detailed the charges, which is the latest incident connected to a comprehensive conspiracy involving Global Capital.
The primary instigator of this extensive fraud scheme, according to the indictment, is Carl R. Ruderman, the former chairman of 1 Global Capital LLC. This scheme has affected over 3,400 investors from 42 states. Four of Ruderman’s collaborators, including Schwartz, have already admitted their guilt and have been sentenced for their involvement in the fraud.
Alan G. Heide, the former CFO of 1 Global from Lake Worth, Florida, confessed to conspiracy to commit securities fraud and was sentenced to 60 months in prison. As part of his sentence, he has been ordered to pay more than $57 million to the victims of the scheme.
Andrew Dale Ledbetter of Fort Lauderdale, Florida, another accomplice, admitted to the charges of conspiracy to commit wire fraud and securities fraud. Consequently, he was sentenced to 60 months in prison and was ordered to pay over $148 million in restitution.
Steven Allen Schwartz, who admitted to conspiracy to commit wire fraud and securities fraud, was sentenced to 24 months in prison and ordered to pay over $36 million in restitution to the victims.
Jan Douglas Atlas of Fort Lauderdale, Florida, also pleaded guilty to similar charges, resulting in an eight-month prison sentence and an order to pay more than $29 million in restitution.
1 Global was a commercial lending company headquartered in Hallandale Beach, Florida, which provided high-interest short-term loans to small businesses. The indictment alleges that the individuals, including Schwartz, were part of the fraudulent activities, deceiving potential investors through false and misleading statements about the company’s profitability.
According to the charges, Ruderman misused 1 Global’s investment funds for personal expenditures such as credit card payments, vacations, insurance payments for art collections and jewelry, and domestic staff salaries, among other things. Furthermore, he allegedly diverted the funds to businesses benefitting him and his family, unbeknownst to the investors.
The allegations claim that substantial questions regarding the nature of 1 Global’s offerings and the need for SEC registration emerged during the business operation. The charging documents allege that Ruderman and his accomplices, including Schwartz, were aware that if the company’s offerings were classified as securities, it could affect the company’s fundraising capabilities and impose additional costs and reporting requirements.
Atlas allegedly wrote two false opinion letters in 2016 at Ruderman’s request, which were used to unlawfully operate the business. According to the indictment, Atlas, Ruderman, and others exploited these letters to illicitly raise funds.
1 Global filed for bankruptcy on July 27, 2018. As per documents from related cases at the time of filing, the company had over 3,400 investors and had raised more than $250 million during the course of the scheme. The bankruptcy proceedings are ongoing.
