Criminal Justice News

Friday, June 22, 2012

Walkersville Man Indicted in a $9.2 Million Investment Scheme

Allegedly Used $1.046 Million in Investment Money to Pay Personal Expenses

BALTIMORE—A federal grand jury returned an indictment today charging Larry Michael Parrish, age 48, of Walkersville, Maryland, with offenses arising from an investment scheme. The indictment was returned on June 20, 2012 and unsealed today upon the defendant’s arrest.

The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation.

According to the 25-count indictment, Parrish was the president of IV Capital Ltd., which he represented to be an investment and trading company. From November 2005 to December 2009, Parrish devised a scheme to obtain approximately $9.2 million from nearly 70 individuals who agreed to invest in IV Capital.

The indictment alleges that Parrish falsely represented to potential investors that IV Capital traded on international exchanges; had $20 million or more under management; employed a number of other traders and staff, when in fact, the company had no employees aside from Parrish; and had established a minimum gross profit margin each month of 5 percent, or 2 percent for smaller investments. Parrish is alleged to have falsely represented that all invested funds would be deposited in an escrow account that would be used to secure a line of credit and would not be actively traded. Each month, Parrish allegedly caused investor funds to be disbursed back to investors which Parrish represented were trading “profits” earned by IV Capital.

The indictment further alleges that out of the approximately $9.2 million in funds that were invested with Parrish and IV Capital between February 2006 and October 2009, Parrish and another individual caused approximately $2.938 million to be lost in trading or consumed by expenses; Parrish transferred approximately $1.046 million to his bank accounts to pay personal expenses, including car payments and leases, clothing, electronics, furniture, personal fitness equipment, rent on his family’s home, utility bills, restaurant meals, entertainment and vacation expenses; and the remaining $5.2 million in investor funds was used to make “profit” payments to IV Capital investors.

The indictment alleges that Parrish ceased making “profit” payments to IV Capital’s investors in July 2009 and then falsely advised IV Capital investors that because some investors had failed to pay taxes on their earnings or failed to file appropriate reports, a bank audit had been initiated and IV Capital was temporarily unable to conduct trading activity, receive investments of new funds, or pay returns on existing investments.

Parrish faces a maximum sentence of 20 years in prison on each of 23 counts for wire fraud; and 10 years in prison on each of two counts for engaging in monetary transactions involving more than $10,000 in criminally derived property. An initial appearance is scheduled today for Parrish in federal court in Baltimore at 3:00 p.m.

An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

United States Attorney Rod J. Rosenstein thanked the FBI for its work in the investigation and praised Assistant U.S. Attorney Jefferson M. Gray, who is prosecuting the case.

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