Lacrosse coach built trust, then he scammed Texas community in Ponzi scheme, feds say
Using the trust he built with his community as a teacher and lacrosse coach, a Texas man partnered with his mother-in-law to scam people out of more than $2.1 million, authorities said.
Together, they convinced more than 20 people to “invest” with them in what was later discovered to be a Ponzi scheme, according to a Sept. 14 news release from the U.S. Attorney’s Office for the Western District of Texas.
Now, the 55-year-old former teacher from Midland has been sentenced to nine years in federal prison after being convicted of conspiracy to commit wire fraud and aiding and abetting wire fraud, records show. His defense attorney did not immediately respond to a request for comment from McClatchy News on Sept. 14.
Authorities said he and his mother-in-law, a former geologist in the oil and gas industry, told people their “investments” were used to purchase royalty interests for gas, oil and mineral projects in Texas and New Mexico.
“The royalty interests were allegedly being purchased through various entities, including an entity called the National Royalty Group, or NRG,” officials said. “In actuality, the National Royalty Group did not exist, and rather than purchasing royalty interests, (the duo) used the money to primarily pay for personal expenses, as well as to advance the Ponzi scheme by providing some ‘distributions’ back to earlier ‘investors.’”
The victims included a couple who knew the man through their son, a lacrosse athlete, according to the federal indictment. They made their first $20,000 “investment” in 2019, and “invested” about $77,500 over the course of the scheme. Authorities said they lost $45,000 after accounting for “distributions” they received.
Another victim included the man’s uncle, who was tricked out of $22,500, according to the indictment. He received three “distributions” worth about $3,047.
The man also convinced two retired teachers to “invest” a combined $40,000 between March 1, 2020, and Oct. 13, 2020, authorities said. They received $2,020 in fake distributions that appeared to be from the National Royalty Group.
People continued to invest with the man and his mother-in-law through at least Dec. 21, 2020, authorities said.
The mother-in-law was sentenced to 5 years in prison earlier this year, records show.
In addition to prison time, they have both been ordered to pay restitution to victims of the scam.
“The individuals that perpetrated this scheme demonstrated extreme greed and disregard for their victims, many of whom were friends, colleagues and even family members,” U.S. Attorney Jaime Esparza for the Western District of Texas said in the release. “In doing so, they harmed the lives and livelihoods of those they claimed to care about.”
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