A federal judge sentenced two Georgia residents to prison for their roles in a Ponzi scheme that took in nearly $30 million from investors. Myra J. Ettenborough, 56, of Roswell, was sentenced to seven years in prison, and Geoffrey A. Gish, 57, was sentenced to twenty years in prison. Both must also serve three years of supervised release upon the completion of their sentence. The two were indicted in August 2010 on one count of conspiracy and ten counts of mail and wire fraud. After a jury trial in September 2011, Gish was convicted on all counts, while Ettenborough was convicted on five counts.
According to prosecutors, Gish owned and operated several entities including Weston Rutledge Financial Services, Inc., ("Weston Rutledge"), Zamindari Capital, LLC ("Zamindari"), Lexington International Fund ("Lexington"), and Oxford Adams Capital, LLC ("Oxford Adams"). From at least February 2004, Gish solicited investments in Zamindari, Lexington, and Oxford Adams through Weston Rutledge, promising annual returns ranging from 44% to 100%. Investors were assured there was no risk of loss if investing in the Zamindari or Lexington funds. Oddly, while Gish represented the Oxford investment as a fund, investors were told to wire or write checks to Oxford Adams Capital, LLC. Each purported fund had a different investment objective, with Zamindari allegedly investing in short term bond purchases, Lexington allegedly trading foreign currency contracts, and Oxford engaged in options trading. Investors were provided with fictitious account statements in connection with their investment that depicted extraordinary rates of return. In total, Gish raised nearly $30 million from his investors.
However, Gish failed to tell his investors that he was operating a classic Ponzi scheme. Of the nearly $30 million raised from investors, $11 million was returned in the form of principal redemptions or interest payments. The remainder of approximately $18 million was misappropriated, used for a variety of personal and business expenses that were not consistent with Weston Rutledge's stated investment objectives. When the fraud was uncovered, only $1 million of investor funds remained in Weston Rutledge's bank accounts.
Along with their respective sentences, both Gish and Ettenborough were each ordered to pay $17,245,275 in restitution. A receiver has been appointed to marshal and distribute assets to victims of the scheme.
A copy of the complaint filed in a parallel civil action by the SEC is here.
A copy of a Department of Justice press release announcing the indictments is here.