Trucking company owner charged in $40m truck investment Ponzi scheme

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Authorities have announced charges against a “repeat scammer” who allegedly defrauded hundreds of investors with a Ponzi scheme.

On April 19, the U.S. Attorney’s Office for the Southern District of New York announced that Franklin Ray, 50, a resident of Michigan, was charged with conspiracy to commit wire fraud, wire fraud and theft of aggravated identity, in connection with various fraud schemes. regarding his operation of a trucking business known as CSA Business Solutions LLC.

Authorities say Ray was previously convicted of wire fraud and released from prison in 2010.

Ray and co-defendant Joseph Winget, 70, a resident of Michigan, were arrested in early March 2022.

US Attorney Damian Williams said: ‘We allege Ray used his alleged trucking companies as vehicles for fraud, including submitting fraudulent applications for small business loans during the Covid-19 pandemic, and defrauding investors for them to give him tens of millions of dollars to participate in a business that was a scam. Ray knew his actions were illegal, having been convicted of similar crimes over a decade ago. Ray may not learn from his latest actions, but he will have to face justice for them.

Authorities say that from “at least” June 2021, Ray began offering investors the opportunity to invest in CSA Business Solutions LLC.

From the US Attorney’s Office:

Specifically, Ray and the investors entered into contracts whereby, for every $20,000 paid by the investor, CSA Business Solutions LLC would purchase and operate a truck in his trucking business. Ray told the investors that the trucks would provide delivery services for a multinational e-commerce and/or multinational shipping company, and that the investors would be entitled to 77% of the trucks’ net income. After the investors purchased the rights to the trucks from CSA Business Solutions LLC, Ray periodically sent them falsified spreadsheets purporting to show the performance of their trucks during the relevant period. In reality, CSA Business Solutions LLC operated few trucks and earned minimal revenue from the trucking business. Instead, Truck Investment Scheme investors received payments from new investments in the scheme or from other sources. Ray eventually tricked around 275 investors into buying more than 2,000 trucks, totaling at least $40 million in fraudulent investments.

Additionally, Ray was accused of conspiring to fraudulently obtain $1.9 million in Small Business Administration (SBA) loans, which are government-backed loans available to small businesses during the pandemic. The loans were obtained on behalf of CSA Business LLC and another Michigan-based trucking company. Authorities say Ray submitted false information and documents to the SBA and commercial lenders, claiming the companies were doing more business and generating more revenue than they actually did.

Co-defendant Winget is charged with intrigues on behalf of CSA Business Solutions LLC, resulting in $1.1 million in fraudulently obtained loans.

Ray is also being charged in connection with a separate scheme in which he allegedly fraudulently induces a New York-based real estate company to make a $175,000 deposit to pay for start-up costs associated with forming a joint venture between the company and CSA Business Solutions. LLC. Ray enticed the company to enter the joint venture by misrepresenting CSA Business Solutions LLC and his own personal business experience. Ray spent the funds on personal expenses, including private plane travel. The joint venture was never formed, according to authorities.

Following Ray and Winget’s arrest in March 2022, authorities seized a bank account associated with CSA Business Solutions LLC.

The U.S. Attorney’s Office says Ray continued to operate the Truck Investment Scheme after his arrest. “Ray misled investors as to why he failed to make expected payments after his arrest and concealed the fact of his arrest and seizure of bank account. During this period, Ray caused new bank accounts to be opened in the name of CSA Business Solutions LLC and continued to solicit and accept funds from investors for trucks that did not exist,” authorities said. in a press release.

FBI Deputy Director-in-Charge Michael J. Driscoll said, “As we allege today, Mr. Ray, who has previously been convicted of federal charges of wire and bank fraud, operated a Ponzi that defrauded hundreds of investors out of over $40 million. Mr. Ray even had the audacity to continue his alleged activity after his last arrest. Today’s charges will force him – once again – to face the consequences of his illegal activity in the federal criminal justice system.

Ray is charged with conspiracy to commit wire fraud, four counts of wire fraud and two counts of aggravated impersonation. Conspiracy to commit wire fraud and three counts of wire fraud each carry a maximum sentence of 20 years in prison. One of the counts of wire fraud involves fraud affecting a financial institution and therefore carries a maximum sentence of 30 years in prison. The charges of aggravated identity theft each carry an additional two-year consecutive mandatory sentence.

Winget is charged with conspiracy to commit wire fraud and one count of wire fraud, each carrying a maximum sentence of 20 years in prison, and one count of aggravated impersonation, punishable by an additional two-year mandatory consecutive sentence.

The FBI participated in the investigation.

Anyone who believes they may have been a victim of these schemes is asked to contact Wendy Olsen-Clancy, Victim Witness Coordinator for the United States Attorney’s Office for the Southern District of New York, at 866-874-8900 or [email protected]

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