A California financial advisor wanted for his role in an alleged $35 million Ponzi scheme went to extreme lengths to evade arrest on Monday by using an underwater “sea scooter” when fleeing FBI agents.
Matthew Piercey spent about 25 minutes in frigid Lake Shasta using the Yamaha 350Li submersible device before resurfacing, according to CBS Sacramento.
“When agents went to arrest Piercey, he hopped in a pickup and led them on a chase that ended at the shoreline of the lake north of Redding,” the station reported.
“Then, Piercey abandoned his truck near the edge of Lake Shasta, pulled something out of it, and swam into Lake Shasta,” federal prosecutors said. “Piercey spent some time out of sight underwater where law enforcement could only see bubbles.”
Piercey, 44, was indicted Nov. 12, and charged with wire fraud, mail fraud, money laundering, and witness tampering. In addition, Kenneth Winton, 67, of Oroville, was charged separately with criminal information with conspiracy to commit wire fraud.
Details of the case
According to court documents, from about July 2015 through August 2020, Piercey allegedly carried out an investment fraud scheme that raised a total of approximately $35 million in investor funds.
Piercey used investment companies he created, called Family Wealth Legacy and Zolla, to solicit funds from investors using a variety of false and misleading statements, including about trading algorithms, the success of the companies’ investment strategies, and the liquidity of investments.
For example, Piercey solicited investor money for an “Upvesting Fund” that allegedly was an algorithmic trading fund with a history of success, but he admitted privately to an associate that there was no Upvesting Fund. Piercey first recruited Winton as an investor, then to assist with raising investor funds, and ultimately to take on management responsibilities at Zolla.
From 2018 to 2020, Winton conspired with Piercey and made various false and misleading statements to investors, including about the success of Zolla’s investment strategies, the reasons for delays in payment to investors, and the current location, value, and nature of Zolla investments.
Piercey and Winton used some investor money to make payments to other investors in a “Ponzi scheme.” In total, they paid back approximately $8.8 million to investors.
They used other investor money for various business and personal expenses, including two residential properties and a houseboat. Few, if any, liquid assets remain to repay investors.
According to court documents, Piercey also tampered with multiple witnesses by discouraging them from responding to grand jury subpoenas related to the investigation.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
