Federal prosecutors are accusing David McDowell Robinson, 56, of Baltimore of engaging in a Ponzi scheme that defrauded more than 900 investors, including victims of Hurricane Katrina, of more than $8 million.
A grand jury indictment against Robinson was issued Wednesday and unsealed Thursday upon his arrest.
“The indictment alleges that David Robinson perpetrated an $8 million Ponzi scheme that victimized innocent investors, including Hurricane Katrina victims who were induced to invest their money in a worthless venture,” said Maryland U.S. Attorney Rod Rosenstein.
Robinson could not be reached for comment.
From April 2003 until March 2006, Robinson was the sole shareholder, president and chief executive officer of Liberty Trade International Inc., according to the 19-count indictment.
During that time, the grand jury alleges, he solicited investors throughout the country ? offering huge returns on investments, promising a 20 percent return on $2,500 in 60 days; a 25 percent return on $5,000 in 90 days; and a 30 percent return on $10,000 120 days.
With the promises, Robinson?s company received more than $8 million in funds from more than 900 investors and used funds from other investors to pay the promised rates of return, prosecutors said.
The indictment further alleges that starting in November 2005, Robinson dispatched an employee to Gulfport, Miss., who made a presentation to victims of Hurricane Katrina. Liberty Trade International received about $80,000 in investments from residents of the Mississippi Gulf Coast area as a result of that presentation, prosecutors said.
Robinson faces a maximum sentence of 20 years in prison and a $1 million fine on charges of wire and mail fraud.
He is scheduled to have a detention hearing today at 2:30 p.m. before U.S. Magistrate Judge Susan Gauvey.
