Towson Man Gets 22 Years In Ponzi Scheme, Restitution TBD

BALTIMORE, MD — A Towson man was ordered to serve more than two decades in federal prison and pay more than $189 million due to what officials say is the largest Ponzi scheme charged in Maryland history. Restitution will be determined later, the judge ruled.

Kevin B. Merrill, 54, of Towson, must spend 22 years in prison followed by three years of supervised release, according to the U.S. Attorney for the District of Maryland.

U.S. District Judge Richard D. Bennett ordered Merrill to pay restitution in the full amount of the victims’ losses, which will be determined later, but which is at least $189,166,116, officials said, and he will forfeit an amount to be determined. The U.S. Securities and Exchange Commission is in the midst of a related case, according to authorities.

Merrill admitted that he and a friend in Texas invited investors to buy consumer debt portfolios, which are defaulted consumer debts sold in batches to collections agencies. To investors, they pretended to be making money by collecting debt payments and selling the debts to debt buyers. Instead, authorities said they were paying investors with money from new investors. Officials said it was one of the largest Ponzi scheme cases charged in Maryland history.

They had taken in $396 million from 2013 through September 2018 and had another $260 million in attempted investments at the time of Merrill’s arrest, according to authorities.

"Kevin Merrill lured investors through an elaborate web of lies, duping them into paying millions of dollars into this Ponzi scheme," U.S. Attorney Robert K. Hur said in a statement.

"As a result of this scheme, a number of victims were devastated, losing their life savings," Hur said. "This sentence sends a strong message that federal prosecutors, federal agents, and our SEC partners will continue to work together to investigate and prosecute those who perpetrate these kind of fraud schemes for their personal gain—leaving a wave of victims in their wake."

Doctors, lawyers, small business owners, bankers, retirees, professional athletes, talent agents, accountants, restaurateurs and construction contractors were among the victims, according to the district attorney. The victims lived in Maryland, Washington, D.C., northern Virginia, Denver, Texas, Chicago, New York and other places, officials said.

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After he was arrested, Merrill admitted he tried to obstruct justice by instructing his wife to hide their assets from the court, according to officials.

"Considering there were hundreds of victims and millions of dollars lost, it is fitting that Kevin Merrill will be spending a significant amount of time in federal prison," Special Agent in Charge Jennifer Boone of the FBI's Baltimore Division said in a statement. “The FBI, and our partners, are firmly committed to holding accountable fraudsters who victimize the public by selling a false bill of goods."

Prosecutors announced his partners are to be sentenced on these dates:

• Jay B. Ledford, 55, of Westlake, Texas and Las Vegas, Nevada; Oct. 29 (detained)
• Cameron Jezierski, 28, of Fort Worth, Texas; Nov. 14 (released under pretrial services)
• Kevin Merrill’s wife, Amanda Merrill, 30 of Towson; Jan. 22, 2020 (released under pretrial services)