Rockville Man Ordered to Repay $28 Million in Ponzi Scheme

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A Rockville man was sentenced Tuesday to 13 years in prison and ordered to pay more than $28.6 million in restitution for operating a Ponzi scheme that bilked millions from investors.

Garfield M. Taylor, 56, was indicted Feb. 21, 2013, and pleaded guilty in March 2014 in federal court to securities fraud. Once he is released from prison, Taylor will be placed on three years of supervised release. In addition to the $28.6 million order of restitution, the judge entered a forfeiture judgment in the same amount, according to the FBI.

“Garfield Taylor masterminded a Ponzi scheme to bilk local investors out of over $28 million,” said Acting U.S. Attorney Cohen Jr. “When his scheme collapsed, his lies left the families and charities who believed his empty promises holding the bag.”

According to the government’s evidence, from September 2006 through September 2010 Taylor convinced people to invest with him by promising them substantial returns on their investment, telling them that he used a sophisticated securities trading strategy that protected against loss and claiming that he had a proven track record of using this strategy effectively.

Instead, Taylor either lost money or made minimal profits far below what was needed to pay the amounts he owed, prosecutors say. The only way that Taylor was able to pay the substantial interest rates was to use portions of the principal invested by new investors to pay amounts that were owed to earlier investors.

At the time of the scheme’s collapse, Taylor owed investors over $28.6 million just to cover the principal he was contractually required to return to them.

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