Former Owner of Investment Firms Sentenced for $10 Million Fraud

[nitpicker]

https://www.justice.gov/usao-edva/pr/former-owner-investment-firms-sentenced-10-million-fraud

Department of Justice
U.S. Attorney’s Office
Eastern District of Virginia

FOR IMMEDIATE RELEASE
Tuesday, February 13, 2018

Former Owner of Investment Firms Sentenced for $10 Million Fraud

RICHMOND, Va. – A Blackstone man was sentenced today to 12 years in prison for his role in an investment fraud scheme that caused more than $10 million in losses to over 50 investors. According to court documents, Sherman Carl Vaughn, 46, and co-conspirator Merrill Robertson, Jr., 38, of Chesterfield, started Cavalier Union Investments, LLC in 2009. From 2009-2016, Vaughn and Robertson solicited individuals to invest money in private investment funds that they managed, as well as distinct investment opportunities that they proposed. Robertson identified potential investors through various contacts; including contacts he developed playing football at Fork Union Military Academy, the University of Virginia, and the National Football League, while Vaughn focused on developing investment opportunities.

According to the statement of facts, Vaughn and Robertson led individuals to believe they were experienced investment advisors, and that they employed other experienced investment advisors to manage their investment funds. For example, Vaughn represented that he was a long-time investor and philanthropist with extensive experience in business and real estate. In fact, Vaughn filed for personal bankruptcy four times, including twice during the time he was soliciting investors for Cavalier.

As a result of this conspiracy, Vaughn and Robertson fraudulently obtained more than $10 million from over 50 investors, spending much of the money on their own personal living expenses, including mortgage and car payments, school tuitions, spa visits, restaurants, department stores, and vacations.
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