Former Bowie Man Ran Bogus Investment Scheme: Prosecutor

BOWIE, MD – A former Bowie businessman faces federal charges over an investment scheme one government agency described as a Ponzi scheme with false promises guaranteeing 25 percent returns on investments.

A federal grand jury indicted Sidney J. Charles Jr., 49, of Raceland, LA, formerly of Bowie, on mail and wire fraud charges arising from an investment fraud scheme. The indictment was returned on April 27, and unsealed Tuesday after Charles was arrested.

If Charles’ clients didn’t earn the investment returns he promised, Department of Justice officials say he used money from other clients to offset the difference.

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Prosecutors say in August 2009 Charles founded The Borrowing Station, and served as its president and CEO from October 2009 through July 2011. Charles marketed The Borrowing Station as an investment firm that offered significant returns on investments.

The indictment alleges that from at least October 2009 through July 2011, The Borrowing Station solicited investors with false promises of high rates of guaranteed return on their money. Bogus claims made included: that investors could earn substantial investment returns such as 25% per year or 10% per month; that The Borrowing Station was an established, successful, and safe investment firm; and that pool participant funds were guaranteed against trading losses, federal officials said. As a result, The Borrowing Station obtained at least $368,628 from at least 17 clients.

The indictment alleges that The Borrowing Station, through Charles: paid pool participants with other pool participants’ funds rather than from any funds earned, and deposited only a portion of pool participant money into actual trading accounts; hid trading losses from customers, including substantial losses; and used the investment money to pay for Charles’s personal expenses.

If convicted, Charles faces a sentence of 20 years in prison for each of two counts of wire fraud and for mail fraud.

Charles is scheduled to have an initial appearance U.S. District Court in Greenbelt on June 8 before U.S. Magistrate Judge Timothy J. Sullivan.