The U.S. Attorney’s Office brought federal charges against a Las Vegas man accused of bilking Ohio investors out of $85 million in a Ponzi scheme.
With Ohio sports betting not set to go live until Jan. 1, 2023, some investors in Ohio couldn’t wait to get in on the action. More than 70 were swindled in the scheme.
The Northern District of Ohio’s U.S. Attorney’s Office unsealed a 13-count indictment last week. In it, Matthew J. Turnipseede, 49, of Las Vegas is charged with defrauding approximately 72 investors out of more than $85 million. He allegedly promised investors double-digit profits through various sports-wagering businesses.
Indictment says Turnipseede promised hefty returns
The indictment asserts that from March 2015 to March 2021, Turnipseede enticed victims to invest in companies he owned. The companies included Edgewize LLC, Moneyline Analytics, Moneyline Analytics Dublin Branch and one other company associated with the defendant.
Turnipseede was able to attract investors by falsely claiming their investments would go toward making sophisticated spot wagers. He said an algorithm would generate large, steady returns.
However, these companied didn’t make a single penny, according to the indictment. Instead, the defendant allegedly used the ill-gotten gains to maintain the business, seek new funds, pay off earlier investments and even fund personal expenses.
Several fake business documents were part of scheme
Under the indictment, the defendant furnished his investors with operating agreements. He said all the money would go to place bets on sports events. Investors did not get back the initial wagers. They were told they would receive a tidy sum from the profits earned.
To bolster his scheme, the defendant would periodically email fraudulent financial statements. They claimed to show substantial gains on their contributions. Turnipseede brought in an accounting firm to produce fake IRS forms.
The defendant’s sports-wagering scheme never paid out the promised profits for investors. The information given to the accounting firm was false. So as not to blow his cover, Turnipseede accommodated any investor who sought to withdraw some or all their money by using money from other victims’ capital, authorities said.
Furthermore, the defendant ostensibly made use of investors’ funds to pay for personal expenses. Those were family vacations to Hawaii and Disneyland, as well as spa treatments, lease payments on multiple vehicles, and country club membership dues.
It’s still unknown how many years he faces
For now, the defendant is facing three crimes. He has yet to appear in court, where the government will have to prove him guilty beyond a reasonable doubt.
If sentenced, Turnipseede’s fate would lie in the hands of the court. It would review factors unique to this case. The defendant’s prior criminal record, if any, will be taken into consideration, along with the defendant’s role in the offenses and also the characteristics of the violation.
It is reasonable to assume that in all cases, the sentence will not exceed the statutory minimum. In most cases, however, the sentence will be less than the maximum. Cleveland’s FBI division is investigating this case. The current prosecutors are assistant U.S. attorneys Erica D. Barnhill and Brian McDonough.
Ponzi schemes pay existing investors with ‘new’ money
Named after Italian businessman Charles Ponzi, a Ponzi scheme is an investment fraud that pays existing investors with funds from new investors. Scheme organizers also often pledge to invest your money and generate high returns with little or no risk.
In 1920, Charles Ponzi acquired up to $15 million in eight months by convincing lenders in the U.S. and also Canada that he could make them rich by investing in international postal reply coupons.
The most famous Ponzi scheme that lasted for more than a decade by Bernard Madoff. He was a former NASDAQ stock exchange chair. He managed to con thousands of investors out of $20 billion in principal funds over several decades.