Months after a Maryland man pleaded guilty to masterminding one of the largest Ponzi schemes ever charged in Maryland, his wife agreed to plead guilty to charges that she concealed and actively hid assets from authorities in the wake of her husband’s 2008 arrest - including cashing in credit card points for more than $25,000 in gift cards. Amanda Merrill, 30, agreed to plead guilty to a federal conspiracy charge in a deal that calls for prosecutors to advocate for a 12-month home confinement sentence. She is scheduled to be sentenced on January 22, 2020.
Kevin Merrill and two business partners were the subject of civil and criminal charges in September 2018 for what authorities alleged was a massive Ponzi scheme touting outsized returns from a purported consumer debt operation. Authorities alleged that Merrill, Jay B. Ledford, and Cameron Jezierski operated a number of entities including Global Credit Recovery, LLC; Delmarva Capital, LLC; Rhino Capital Holdings, LLC; Rhino Capital Group, LLC; DeVille Asset Management LTD; and Riverwalk Financial Corporation (the "GCR Entities"). The GCR Entities allegedly solicited investors through promises of steady returns from the deeply-discounted purchase of consumer debt portfolios. Consumer debt, including automobile, credit card, and student loan debt, is often bundled into portfolios and sold in bulk to investors, which the GCR Entities told investors they were purchasing for their benefit. While the scheme involved the actual purchase of some debt portfolios, authorities allege that the vast majority of purported debt purchases were fraudulent and that the actual purchases of debt portfolios were used as part of the scheme to solicit more investors.
Using a dizzying array of interwoven entities and bank accounts, the trio allegedly solicited both individual and institutional investors across the nation through the provision of documentation describing the investment structure and presentations offering projections about the anticipated investment returns. These promises included offering some investors 100% of collections of up to 25% of their principal investment annually - meaning those investors were offered annual returns of up to 25% along with the option for even higher returns. Potential investors also received "due diligence" documents prepared by Ledford or Jezierski providing a supposed analysis of the portfolio(s) they were purchasing as well as the anticipated purchase price. In total, the GCR Entities are believed to have raised over $394 million from at least 230 investors.
But authorities allege that the GCR Entities had not been in the business of buying consumer debt since 2014, and that the purported investment opportunity was a giant Ponzi scheme that used new investor funds to pay returns to existing investors. Approximately $197 million was paid out as purported remittances, collections, or profits, meaning that investors are facing total losses of roughly $150 million. Unfortunately, authorities believe that a significant portion of those losses were diverted to sustain the trio's extravagant lifestyles. The indictment alleged that investor funds were used to buy over 20 high-end automobiles, at least nine houses, and over $8 million in jewelry, as well as bankrolling at least $25 million in casino gambling.
Merrill's Vast Assets
Merrill was apparently not frugal with the riches generated from the alleged scheme, with authorities ultimately forfeiting a stunning array of real estate, luxury goods, and automobiles that were purportedly purchased with scheme proceeds. In addition to a $10 million waterfront residence, a brand new 35' boat, an interest in an Gulfstream aircraft, and a 9+ carat diamond ring, Merrill accumulated more than two dozen luxury automobiles that includes four Lamborghinis, two Rolls-Royces, and four Ferrarris. Prosecutors also claimed that Merrill spent nearly $1 million at luxury goods retailer Louis Vuitton over a five-year period and was an avid collector of red wine.
Amanda Merrill’s Involvement
Following Merrill's arrest in September, authorities claim that he conspired with his wife to conceal and dispose of assets in violation of the Court's orders during coded jailhouse phone calls that included reference to their $10 million waterfront Florida home as the "restaurant." Apparently unbeknownst to the pair, authorities were recording those calls. During one of the calls, Merrill allegedly provided his wife with the code to a safe at their Florida home. Amanda Merrill then visited the property with a companion and flew back to Maryland with two over-weight-limit suitcases, later having her attorney email a letter to authorities stating that, among other things, Merrill had visited the Florida house to retrieve boxes of children’s clothing and personal items and adding that “the unlocked safe at the house was empty.” Authorities subsequently executed a search warrant at Merrill’s home, finding $15,000 in cash and then opening the Florida safe using the code provided by Merrill to his wife.
Authorities also alleged that, weeks after her husband’s arrest and being warned that all of his assets were frozen, Amanda Merrill began cashing out an apparent large cache of points on an American Express business credit card belonging to her husband and on which she was not an authorized signer. Her total take: 127 gift cards totaling over $26,000 to retailers including Home Depot, Sephora, Target, Nordstrom, and Starbucks. These were also not disclosed to authorities but were likely revealed during subpoenas by the court-appointed receiver.
Agents later found a note in Kevin Merrill's sock prior to a scheduled jailhouse visit that contained instructions to sell his golf clubs, drink his high-end wine and replace it with "shit" wine, and to "get stuff out." Amanda Merrill was then charged with multiple criminal counts in a December 10th complaint including conspiracy and removing property to prevent its seizure. She was released without bail the following day.
Merrill’s husband, Kevin Merrill, pleaded guilty to conspiracy and wire fraud charges in May 2019 and will be sentenced tomorrow, October 10th. The charges carry a maximum potential sentence of 40 years.