NY insurance agent accused of running a $50 million Ponzi scheme

New York Attorney General Letitia James announced the arrest of Miles Burton Marshall, a Madison County tax preparer and insurance agent, for allegedly operating a massive Ponzi scheme for over three decades that stole more than $50 million from 988 investors in Madison County and other nearby counties.

Marshall solicited unsuspecting clients to invest millions of dollars into his so-called “Eight Percent Fund,” claiming that their funds would be primarily used for real property investments. Instead, Marshall allegedly used funds to pay investment returns to prior investors, as well as to pay his personal expenses and the expenses of his other businesses.

A 49-count indictment filed by Attorney General James was unsealed Monday, charging Marshall with multiple counts of Grand Larceny, Securities Fraud, and Scheme to Defraud.

“For over three decades, Miles Burton Marshall fooled his community into believing he was a trusted businessman when in reality, he was scamming his clients and neighbors out of their life savings,” said Attorney General James. “Fraud of any kind is not acceptable in New York. My office will continue to ensure all those who cheat New Yorkers out of their life savings are held accountable.”

“This arrest once again shows that those who scheme to swindle New Yorkers out of their hard-earned money for their own personal gain will be held accountable for their actions,” said New York State Police Superintendent Steven G. James. “Mr. Marshall allegedly misled his clients on the usage of their money, spending the cash on his own expenses and leaving his victims with a false sense of financial security. I commend our State Police members and the Attorney General’s Office for their outstanding work on this case.”

A long-term investigation led by the Office of the Attorney General’s (OAG’s) Criminal Enforcement and Financial Crimes Bureau (CEFC) revealed that beginning in the early 1990s and continuing through March 2023, Marshall solicited potential investors, including his tax and insurance clients, to invest tens of millions of dollars into his so-called “Eight Percent Fund.”

Marshall allegedly told investors that their funds would be primarily used to purchase property, refurbish rental houses, and pay expenses for rental properties. When soliciting investments, he falsely represented the profitability of his real estate business, claiming it was so profitable that he could promise investors eight percent yearly returns.

After soliciting investments, Marshall allegedly used investors’ money to pay investment returns to prior investors, and finance operating expenses for his other businesses, including tax preparation, printing press, maintenance, and storage unit businesses. In addition to business expenses, OAG alleges Marshall used hundreds of thousands of investors’ dollars for personal expenditures, including travel purchases at American Airlines, Priceline, and United Airlines, at retail and online stores, such as Amazon, Lululemon, and Target, and at grocery stores, restaurants, and yoga studios.

To further his scheme, Marshall allegedly directed his staff to generate “Transaction Summaries” for investors, falsely representing their account balances and the interest they purportedly earned. Marshall’s investors relied on these false statements, believing they were earning a steady income, and continued to invest. As a result of Marshall’s investment scheme, many investors lost their life savings.

CEFC’s investigation revealed that by 2016, Marshall’s total liabilities exceeded his assets by over $40 million. Still, he continued to solicit new investors and represent to prior investors that their investments were profitable for the next seven years until he could no longer repay investors, and filed for bankruptcy. Marshall made sworn statements in the bankruptcy proceedings that as of March 2023, his total assets were less than $22 million, and he owed 988 victim investors over $90 million, including over $50 million in principal they invested.

The OAG’s 49-count indictment – unsealed today in Madison County Court – charges Marshall with 21 counts of Grand Larceny in the Second Degree (a Class C felony), three counts of Grand Larceny in the Third Degree (a Class D felony), 24 counts of Securities Fraud under the Martin Act (a class E felony), and one count of Scheme to Defraud in the First Degree (a class E felony).

Marshall was arraigned today before the Honorable Rhonda Youngs. Marshall was released on his own recognizance and required to surrender his passport and not leave New York State. If convicted, Marshall faces a maximum sentence of up to 10 to 20 years in prison.

The charges are merely accusations, and the defendant is presumed innocent unless and until proven guilty in a court of law.

Attorney General James thanks the Financial Industry Regulatory Authority (FINRA) and its Criminal Prosecution Assistance Group, the U.S. Securities and Exchange Commission, and the New York State Police for their invaluable assistance in this investigation. Attorney General James also thanks the Office of the United States Trustees, the Village of Hamilton Police Department, the Madison County Real Property Tax Services Department, and the Madison County District Attorney’s Office for their assistance.

This case is being prosecuted by Assistant Attorneys General Andrew Tarkowski and Eleanor Biggers of CEFC. Analytical work was provided by Senior Legal Analyst Joseph Conniff and Legal Analyst Ifu Ojukwu, under the supervision of Supervising Analyst Paul Strocko and Deputy Supervising Analyst Jayleen Garcia. Forensic accounting was conducted by Senior Auditor Investigator Brenna Magruder and Principal Auditor Investigator Danielle Dudley, under the supervision of Chief Auditor Kristen Fabbri and Deputy Chief Auditor Sandy Bizzarro of the Forensic Audit Section. CEFC is led by Bureau Chief Stephanie Swenton and Deputy Bureau Chief Joseph G. D’Arrigo.

The criminal investigation was conducted by Senior Detective Joel Cordone, under the supervision of Deputy Chief Juanita Bright, Assistant Chief Samuel Scotellaro, and Detective Supervisor Peter Fitzgerald of the Major Investigations Unit. The Investigations Bureau is led by Chief Investigator Oliver Pu-Folkes. Both CEFC and the Investigations Bureau are part of the Division for Criminal Justice, which is led by Chief Deputy Attorney General Jose Maldonado and overseen by First Deputy Attorney General Jennifer Levy.