As his jury trial was about to begin, the former president of Liberty Trade International Inc. abruptly pleaded guilty to defrauding more than 900 investors, including victims of Hurricane Katrina, of more than $8 million.
David McDowell Robinson, 56, of Baltimore, admitted Wednesday in U.S. District Court to engaging in a Ponzi scheme that promised investors huge returns quickly on their investments.
“This case demonstrates how important it is for people to be cautious about investment proposals that sound too good to be true,” Maryland U.S. Attorney Rod Rosenstein said. “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.”
Prosecutors said the businessman promised investors 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 in 120 days, but never delivered the money.
At an earlier hearing for Robinson, Assistant U.S. Attorney Jefferson Gray said Robinson committed the fraud to keep up hisappearance as a successful graduate of one of Baltimore?s most prestigious private schools and an Ivy League university.
“A lot of the reason he committed these crimes was to make himself look financially successful, financially astute,” Gray said. “In other words, the type of person you would expect a grad of Gilman, Cornell and University of Maryland School of Law to be.”
Among those Robinson scammed out of funds were survivors of Hurricane Katrina, prosecutors said.
Starting in November 2005, Robinson dispatched an employee to Gulfport, Miss., where he solicited 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.
A sentencing date has not been set.
