Sunday, July 19, 2009

Now-Disbarred Georgia Attorney Cops Plea To Phony Real Estate Investment Scam Ponzi Scheme; Accused Of Stealing $1.9M From Clients, Friends

In Atlanta, Georgia, the Fulton County Daily Report reports:
  • For nearly four years, McDonough, Ga., attorney Steven H. Ballard capitalized on his credibility as a real estate and business law attorney to bilk friends and clients of more than $2 million in what federal prosecutors say was a Ponzi scheme(1) in which Ballard siphoned more than $200,000 for his personal use. [... Last week], Ballard pleaded guilty to one count of wire fraud in a criminal information (a federal charge filed either prior to or in lieu of a grand jury indictment) that accused him of stealing $1,910,827 from 24 clients and investors in Georgia, Florida and Tennessee between September 2002 and May 2006.

***

  • [Federal prosecutor Gale] McKenzie said Ballard's scheme relied primarily on his ability to lure friends and clients into what he billed as real estate investment opportunities. Ballard collected thousands of dollars from investors that he claimed to have used to buy properties and then resell at a significant profit. [...] But Ballard rarely, if ever, made the promised real estate purchases, McKenzie said. Instead, he forged sales contracts, deeds, settlement statements and sellers' signatures to trick his clients into believing the promised real estate transactions had taken place. He then appropriated those funds for his personal benefit or to repay clients and investors he had already bilked and who were threatening legal action, McKenzie said.

  • [Ballard's lawyer, T. Michael] Martin said that no banks were defrauded by Ballard's phony transactions because he secured money primarily from longtime clients and friends, many of whom dipped into their retirement funds with the promise of quick, lucrative returns.(2)

For the story, see Ga. Lawyer Pleads Guilty to Ponzi Scheme Worth $2 Million (Steven Ballard's victims were friends and clients).

For the U.S. Attorney (Atlanta) press release, see Former Georgia Attorney Pleads Guilty To Multi-Million Dollar Real Estate Ponzi Scheme (Over a Dozen Victims Defrauded in Georgia, Florida & Tennessee).

(1) Named for famed swindler Charles Ponzi, a Ponzi scheme collects money from legitimate investors but pays returns on those investments only by luring in additional investors and using their contributions to pay the scheme's original participants. A Ponzi scheme eventually collapses because it requires more and more investors and an increasing flow of cash to pay returns required to sustain the fraud.

(2) For those who have been screwed out of money or property through the dishonest conduct of a Georgia attorney in the course of providing legal representation, and seek some financial reimbursement for the screwing over, go to the State Bar of Georgia Clients' Security Fund for more information. For other states and Canada, see:

posted by Home Equity Theft Reporter at 4:02 AM