Guilty Plea in $18.5 Million North Carolina Ponzi Scheme

A Mooresville, North Carolina man entered guilty pleas on Thursday admitting to operating a Ponzi scheme that ultimately took $18.5 million from over 100 investors.  Shelby Dean Martin, 73, pled guilty to nineteen felony counts of securities fraud in a North Carolina state court, and was sentenced by Judge Christopher Collier to serve a minimum of 9 years 8 months in state prison.  Martin could ultimately serve up to thirteen years under the range imposed by Judge Collier.

Martin operated D. Martin Enterprises and DM Ventures, soliciting money from investors despite never being registered with the state of North Carolina to sell securities.  Investors were told that their money would be used to fund several companies, and that their funds were safe and obtainable at any time upon 30-day notice.  Investors were issued promissory notes detailing their investments, as well as promising interest payments between 10% and 50% annually.  Rather than receive interest based on profits obtained by Martin, investors were paid with funds from new investors - a classic Ponzi scheme.

Along with his prison sentence, Martin was also ordered to pay restitution to his victims in the amount of $5.35 million.  This case is notable in that prosecution of Martin's offenses was handled by the state of North Carolina.  Typically, federal authorities intervene and take the first shot at prosecution.