3 South Florida men get prison time for their roles in a $300 million investor fraud
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The 1 Global Capital Fraud
What was sold as a boost for small businesses and an opportunity for mom-and-pop investors turned out to be a massive scam involving financial thugs throughout the Miami-Fort Lauderdale metropolitan area.
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A mega-scam run through Hallandale Beach company 1 Global Capital cost investors anywhere from $280 million to $322 million, depending on which guilty plea you read. Three more South Florida men, all in their mid-to-late 70s, can now say it’s cost them their freedom.
Former Fort Lauderdale attorney Andrew Ledbetter, 79, was sentenced Friday to five years in prison and $148,976,248 in restitution by U.S. District Court Judge Roy K. Altman after pleading guilty to one count of conspiracy to commit wire fraud and securities fraud. Ledbetter is also looking at civil penalties and disgorgement from the Securities and Exchange Commission.
The former chief operating officer for 1 Global Capital, 76-year-old Steven Schwartz, pleaded guilty to the same charges in the same Fort Lauderdale federal court and got two years’ time and $36,362,392 restitution in July.
Altman gave Jan Atlas a sentence of eight months and $29 million restitution on Aug. 20 after he pleaded guilty to securities fraud. Like Ledbetter, Atlas, 76, had been a Fort Lauderdale attorney who took disciplinary revocation — accepting being tossed from the Florida Bar in exchange for the Bar discipline case being closed — when his 1 Global-related actions resulted in being charged by the Florida Bar.
Already starting to transition from federal prison to freedom is 1 Global’s chief financial officer Alan Heide, now in the Residential Reentry Management office in Miami. Heide served part of his five-year sentence for conspiracy to commit securities fraud in Jesup, Georgia’s federal prison.
In each factual proffer statement, an admission of facts with a guilty plea, 1 Global Capital CEO Carl Ruderman gets referred to as “Individual #1” because he hasn’t been convicted nor charged criminally.
In federal civil court, the Securities and Exchange Commission got a judgment against Ruderman that included a $32 million disgorgement; a $15 million civil penalty; another $750,000 in cash; and half the equity in his five-bedroom, seven-bathroom, 9,600-square-foot tower suite condominium at Aventura’s Bella Vista North.
The piles of cash and lies at 1 Global Capital
The concept behind 1 Global Capital could be called “Amscot for small business” — short-term, high interest loans, but instead of payday payback, the payback comes in automatic withdrawals from the borrowers’ bank accounts. Investors would receive the principal and some of the interest.
But the 3,600 investors weren’t told about gargantuan commissions 1 Global paid brokers and middlemen. Also not disclosed was how much Ruderman, according to the factual proffer statements, used the company as a personal bank.
But Ledbetter, who raised $100 million from investors and made $3 million including commissions, knew. So did Schwartz, Heide and Atlas. When questions arose as to whether 1 Global Capital was selling investors a security, everybody knew they needed a legal shield.
“Ledbetter knew that if 1 Global’s investment offering were determined to be a security, this would undermine the ability of 1 Global to raise funds from investors and to continue to operate without substantial additional expenses and reporting requirements,” his admission of facts says. “This also would undermine the ability of lndividual #1 and others, including Ledbetter, from being able to profit from 1 Global’s operations in the form of fees, commission payments, or other financial transfers.”
When the first attorney that 1 Global hired stated verbally his opinion that the company was offering a security and didn’t get off that opinion, “Individual #1 became angry and demanded his money back from Attorney #1, indicating that he intended to pay to get the answer he wanted from Attorney #1, not the answer he got.”
So, Atlas provided the legal lying with a May 17, 2016, opinion letter that said 1 Global wasn’t offering a security.
His admission says, “[Atlas] knew at the time of this letter that various aspects of how the 1 Global investment actually worked, were omitted or described inaccurately in the letter, and this was done intentionally in order to achieve the opinion that Individual #1 desired.”
This story was originally published August 30, 2021 at 2:12 PM.
