The attorney for a Kalamazoo native whose financial firm is the subject of a civil case in Colorado and accused of selling millions of dollars in unregistered securities to hundreds of investors said Tuesday his client's firm fell victim to a larger, nationwide Ponzi scheme to the tune of $390 million.
Jim Kopecky represents Robert "Bo" Parfet, who co-owned and managed the investment firm Jumar Management. The firm is based in Colorado. The Colorado Attorney General's Office said Parfet's firm reinvested a majority of money raised in securities into what turned out to be that Ponzi scheme.
An investor source who claimed to fall victim to the larger scheme told Newschannel 3 at least 50 other Kalamazoo area investors might have been impacted. It remains unclear whether those investors will get their money back.
In an email to Newschannel 3, Kopecky said Jumar Management, its funds and the Parfet's are victims of a complex fraud that ensnared a number of sophisticated investors.
"Of course, no one at Jumar knew or had reason to suspect that funds were being invested in a Ponzi scheme," Kopecky said.
"Of course, no one at Jumar knew or had reason to suspect that funds were being invested in a Ponzi scheme." — Jim Kopecky, attorney for Bo Parfet
"To the contrary, Jumar’s extensive due diligence, which included, among other things, visiting collection facilities and reviewing contracts — remember the perpetrators of this fraud were also running legitimate debt collection business and buying real consumer debt — revealed no wrongdoing," Kopecky said.
In November, one of the three men facing federal charges for their roles in the larger Ponzi scheme will be sentenced. A federal judge sentenced two others involved in October.
In the nationwide Ponzi scheme, federal prosecutors said much of the money raised went to fund lavish lifestyles. Federal prosecutors said Kevin Merrill of Maryland was the front man in that scheme where Merrill and his co-conspirator Jay Ledford defrauded Parfet’s firm and 229 vulnerable investors over a five-year period.
Merrill pleaded guilty to the charges and was sentenced to 22 years in federal prison. Ledford pleaded guilty and was sentenced to 14 years. Merrill was ordered to pay $189 million in restitution to investors who lost money.