June 1. [Updated] By Dave Yochum. Two Cornelius residents, Marlin Hershey, 53, and Dana Bradley, 53, face up to 20 years in prison after pleading guilty to wire fraud conspiracy for orchestrating a large-scale investment scheme.
The Feds said they ran a classic Ponzi scheme.
According to filed court documents and the plea hearings, from approximately 2009 to 2021, the partners conspired to defraud numerous victims who invested in two unregistered securities offerings they promoted, Performance Retire on Rentals (Performance Retire), and Distressed Lending Fund (DLF).
Hershey and Bradley admitted in court that both offerings eventually failed causing significant losses to investors, many of them local.
Nevertheless, they provided victims with investment materials that contained false and misleading statements and did not disclose material information.
For example:
—Bradley and Hershey failed to disclose that they received commission-like payments based on the amount of investments they sold.
—The two provided investors with offering materials that represented the opposite – that nobody would be paid a commission in connection with the investments.
—Bradley and Hershey received payments that were typically 10 percent of an investor’s initial investment and often received an additional payment when an investor extended an investment.
“In this manner, Hershey and Bradley received hundreds of thousands of dollars in undisclosed payments from the sale of securities,” according to a press release issued by Dena J. King, U.S. Attorney for the Western District of North Carolina; North Carolina Secretary of State Elaine F. Marshall; and Robert M. DeWitt, Special Agent in Charge of the Federal Bureau of Investigation/Charlotte Division.
Total amount of restitution
The total amount of restitution, as per the plea agreement, is $333,791, apparently mitigated by the fact that Bradley and Hershey, through Performance Retire and DLF, made payments to “investors/victims after the United States had initiated its investigation.”
Failure to disclose
According to court records, Hershey and Bradley also failed to disclose to investors other material information, including negative information about the defendants’ backgrounds and the financial woes faced by some of the entities for which they were soliciting investments.
Because Hershey and Bradley often solicited the same group of investors to invest in the various projects, they took steps to conceal such financial difficulties by making undisclosed loans to various entities so that the entities could, in turn, make their required interest payments to investors.
Classic Ponzi
Hershey and Bradley also solicited new investors and used the new investors’ money to repay the loans and to make Ponzi-style payments to previous investors.
Background
Both own million-dollar properties in Cornelius; Bradley on Waterview and Hershey on Fisherman’s Rest. Both men were prominent Cornelius businessmen and active in philanthropy.
Bryant Boys
Bradley’s and Herrshey’s other enterprises include Bryant Boys LLC. Both are graduates of Bryant University where they are listed on the Honor Roll of Donors.
The two are out on bond. The wire fraud conspiracy charge carries a maximum sentence of 20 years in prison and a $250,000 fine. A sentencing date has not been set.
