The CEO of a Broward company used for a $250 million Ponzi scheme fraud gets indicted

CEO Carl Ruderman’s part in the 1 Global Capital fraud already has cost him money — a $15 million civil penalty, another $750,000 cash dunning — and real estate, as in 50% of the equity in a five-bedroom, 12-bathroom Aventura condominum. But, Wednesday, the Justice Department came for something else 3,400 investors over 42 states want Ruderman to lose:

Time.

Ruderman, 81, has been indicted on charges of wire fraud, conspiracy to commit wire and mail fraud and conspiracy to commit securities fraud.

Ruderman’s indictment puts the size of the 1 Global Capital fraud at $250 million, the lowest estimation to appear in any of the previous indictments or guilty pleas. Previous estimates ran up to $322 million.

If convicted, Ruderman will be the fifth senior citizen in the Miami-Fort Lauderdale-Palm Beach metropolitan area to do federal prison time for participation in a fraud that financially skinned mom-and-pop investors across the country.

Lake Worth’s Alan Heide, 1 Global Capital’s 65-year-old former CFO, got five years and assigned $57 million in restitution after pleading guilty to conspiracy to commit securities fraud.

Delray Beach’s Steven Schwartz, 1 Global Capital’s 78-year-old former chief operating officer, got sentenced to two years and $36 million restitution after pleading tuilty to conspiracty to commit wire fraud and securities fraud.

Fort Lauderdale attorney Andrew Ledbetter, 81, got five years and $148 million restitution after pleading guilty to conspiracy to commit wire fraud and securities fraud. Ledbetter raised $100 million from investors and made $3 million in commissions.

Fort Lauderdale attorney Jan Atlas, 78, got eight months in prison and $29 million in restitution. When 1 Global Capital needed a legal opinion that what investors were offered wasn’t a security, an opinion that would allow the fraud to continue with less regulatory oversight, Atlas provided it with a legal opinion letter saying exactly what 1 Global needed. He admitted the letter was a lie.

Atlas and Ledbetter agreed to disciplinary revocation from the Florida Bar, accepting essential disbarment instead of going through the disciplinary process ignited by their criminal court guilty pleas.

The Securities and Exchange Commission, which got the aforementioned money and land from Ruderman in a judgment, also got civil money penalties and disgorgement from, among others, unregistered brokers Henry J. “Trae” Wieniewitz, Roy Gagaza, Chris A. Dantin, Christopher D. Dantin, David P. Ortiz and Andrew White.

Despite the penalties and restitution ordered, attorneys handling the ongoing distribution of funds to defrauded investors don’t expect them to get all their money back.

The 1 Global Capital scam

The purported idea behind Hallandale Beach-based 1 Global Capital could be summed up as “Amscot for small business.” The company would make short-term, high interest loans to small businesses. The payback would come via automatic withdrawals from the borrowers’ bank accounts. Investors would receive their principal and a piece of the interest.

According to the guilty pleas, nobody told investors about the corpulent commissions 1 Global paid brokers (including the unregistered ones mentioned above). Nobody told investors that Ruderman, the guilty pleas said, treated 1 Global Capital like his family ATM.

The men behind the four guilty pleas knew what investors didn’t. They also knew that if anybody determined 1 Global Capital was selling investors securities, more expenses and oversight would follow. They welcomed neither.

Ledbetter’s admission of facts said, “This also would undermine the ability of lndividual #1 (the name used for Ruderman in the guilty pleas) 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.”

The first attorney 1 Global hired told the company it was offering a security and didn’t let his fraudulent client’s pleas sway him.

“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,” Ledbetter’s plea said.

Atlas gave them the legal opinion they wanted on May 17, 2016.

Meanwhile, the guilty pleas say, Ruderman’s draining of accounts plummeted 1 Global into being a Ponzi scheme to keep at least some investors happy as the company barreled toward the bankruptcy it declared in 2018.

“Eventually, these transfers constituted amounts well in excess of [Ruderman’s] investment into the business,” Heide’s admission of facts states. “By late 2016, at least, these transfers constituted nothing more than misappropriations of investor cash that had not been deployed to a [merchant cash advance] agreement and were instead deployed at [Ruderman’s] direction for his own use.”

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