Mastermind of $60 Million Silver Ponzi Scheme Faces Sentencing

A South Carolina man accused of masterminding a $60 million Ponzi scheme, one of the largest schemes in state history, is scheduled to be sentenced Tuesday.  Ronnie Wilson, of Anderson County, South Carolina, was arrested in early April and charged with mail fraud in an alleged Ponzi scheme that held itself out as a silver investment company.  Wilson later pled guilty to two counts of mail fraud in July.  Mail fraud carries a maximum statutory sentence of twenty years per count, as well as a $250,000 criminal fine.  Typically, the US Probation Office prepares a sentencing report providing details on the calculation of a sentencing range, as well as estimated investor losses.  This recommendation is advisory, not binding, on the federal judge tasked with delivering the sentence.

Wilson operated Atlantic Bullion & Coin, Inc., ("ABC") for at least a decade, representing to potential investors that they could realize profits from ownership of silver without having to actually physically possess the silver.  To accomplish this, Wilson purported to purchase and warehouse silver on behalf of investors. Investors were told that their silver would be held in safe-keeping at a Delaware depository, and were provided with regular account statements allegedly showing regular appreciation in their holdings.   In total, Wilson raised approximately $90 million from over 1000 investors in 25 states.  

However, in reality, Wilson used the majority of investor funds not for the purchase of silver, but to perpetrate a massive Ponzi scheme in which "profits" paid to existing investors were simply the re-distribution of incoming investor funds.  While investors were told that Wilson kept nearly $17 million of silver at a Delaware depository, they later discovered that the depository had never heard of Wilson.  Of the $90 million raised from investors, authorities and the court-appointed receiver have since pegged investor losses at approximately $60 million.  The outlook for recovery of those funds remains dim; court-appointed receiver Beattie B. Ashmore, has indicated that he "would paint a very dim picture" of the chance of a large-scale recovery.

In a related development, a recent filing by the Receiver illustrates the possible location of some scheme proceeds.  In early October, the receiver sought to expand the scope of the receivership to include Wallace Lindsey Howell and Tracy Neily.  While Howell was recently charged by authorities, the emergence of Neily's name in the case is new.  In the filing, Ashmore explained that his investigation has revealed that

Tracy Neily, individually and through companies already subject to the Court Order, operated as an alter-ego of Wilson and/or AB&C and thus should be added to the Court Order. The Receiver is in possession of data showing that Neily, directly or indirectly, profited substantially from the Ponzi scheme and, in concert with Wilson, diverted funds directly to her and her family members.

Several days later, United States District Judge J. Michelle Childs granted the receiver's request, issuing an order granting Ashmore authority to, among other things, take immediate possession of all assets and property traceable to Wilson's fraud currently in possession of Wilson, Howell, and/or Neily's family members and acquaintances.