According to a report, an alleged $300 million Ponzi scheme ended with FBI agents showing up at the suspected fraudster’s door and shooting him in the middle of a bizarre four-hour standoff.
The FBI raided the home of Las Vegas attorney Matthew Beasley — one of two men accused of running the Ponzi scheme — earlier this year after being tipped off by short seller Hindenburg Research, according to The Wall Street Journal on Thursday (paywall).
Beasley opened the door sideways but then faced forward, revealing he was pointing a gun at his own head, in a move straight out of a Hollywood crime film. According to the paper, he then brandished the gun in front of the officers and swung it at them.
Beasley retreated back into his home, bleeding from gunshot wounds in his chest and shoulder, after FBI agents shot him twice. The feds brought in a hostage negotiator, and Beasley “said he wished the agents had killed him—he said he would rather die than go to prison,” according to federal prosecutors quoted in the Journal.
Judd and Beasley have spent millions on expensive cars since launching the Ponzi scheme in 2017.
Photographs by Getty Images
After a four-hour standoff, Beasley admitted that the so-called “investment” opportunity he was running with Jeffrey Judd, J&J Purchasing and J&J Consulting Services, was a scam. He made it out of his house alive and was apprehended.
It appears that Beasley and Judd’s lavish lifestyle is coming to an end. Since they began seeking investments in 2017, the two men have purchased a private jet, millions of dollars in real estate, and opulent cars such as Bentleys, Rolls Royces, Porsches, and Aston Martins.
Beasley was charged with assault on a federal officer but not with financial misconduct.
Linkedin/Matthew Beasley
The dramatic climax also marks the end of a multi-million dollar Ponzi scheme, a financial swindle that entices investors with the promise of a risk-free investment with high returns — the operator repays old investors with money from new investors.
J&J told thousands of people — mostly Western U.S. investors who spent $80,000 to $100,000 — that they would pay for individuals to file personal injury lawsuits. In just 90 days, the bet returned 12.5 percent.
Nate Anderson, the founder of Hindenburg, told the Wall Street Journal that the operation was “the most obvious Ponzi scheme we’ve ever seen.”
Hindenburg was alerted by an accountant who had several clients who had invested and suspected something was amiss. One Hindenburg crew member happened to know Judd’s high school classmate, Mark Holt and enlisted his assistance in learning more about the operation.
Holt, who owns a private jet charter business, traveled to Las Vegas to meet with Judd and J&J marketers. Hindenburg outfitted Holt’s plane with microphones and cameras to gather intelligence on the operation. One marketer admitted to Holt that the deal was so good that some investors suspected it was a Ponzi scheme. And, after careful consideration, Hindenburg concluded that it was indeed too good to be true.
Photographs by Getty Images
Hindenburg shared the information it gathered with the FBI, and investigators soon visited Beasley’s home.
Because the investment scheme was private, Hindenburg was unable to use its usual strategy of shorting the stock. Hindenburg instead filed a whistleblower complaint with the Securities and Exchange Commission in order to receive a reward if the government imposed a significant penalty.
Hindenburg is best known for revealing the electric truck company. Nikola’s trucks were defective. Nikola had shared a video of one of its trucks driving when it was actually rolling downhill.
Investors have begun suing J&J; last week, five investors filed an involuntary bankruptcy petition, requesting that the entity declare bankruptcy in the hope of recovering some of their money.
Beasley was charged with assaulting a federal officer but has yet to face financial charges. Beasley’s attorney stated earlier this month that the incident was a “one-time, extreme emotional crisis.” The FBI is still looking into the financial crimes.
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