It sounded like a deal that was just too good to be true.
And federal prosecutors say that?s exactly what it was.
The former president of Liberty Trade International Inc., David McDowell Robinson, 56, of Baltimore, allegedly offered more than 900 investors ? including victims of Hurricane Katrina ? huge returns quickly on their investments.
Prosecutors say he 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 a grand jury alleges the promises of huge returns were nothing more than an old-fashioned Ponzi scheme.
Robinson was indicted Wednesday on 19 counts, including wire and mail fraud charges, which carry maximum sentences of 20 years in prison and $1 million fines, and arrested Thursday. U.S. District Court Magistrate Judge Susan Gauvey released him into the custody of his estranged wife Friday and ordered him to stay off the Internet.
Assistant U.S. Attorney Jefferson Gray said Robinson committed the fraud to keep up his appearance as a successful graduate of the Gilman School in Baltimore, Cornell University and University of Maryland School of Law.
“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.”
Robinson kept up with the promises of large returns by using funds from other investors to pay the promised rates of return, prosecutors said.
Robinson?s attorney, Joseph Evans, said the government?s case against Robinson was not so cut- and-dry.
“The money that was recovered was actually invested,” Evans said. “Much of it was invested. Some of it was used by Mr. Robinson, but modest sums compared to what was received.”
Evans said that Robinson has not hoarded money from government detection.
“Does Mr. Robinson have cash out there hiding some place?” Evans said. “The answer is no. The answer is a resounding no.”
