LUBBOCK, Texas (KCBD) – A court-appointed receiver is asking a judge to immediately freeze the assets of a Lubbock man accused in lawsuits of helping run a massive Ponzi scheme that may have devastated more than 300 investors.
The U.S. Attorney for the Western District of Texas and multiple civil lawsuits describe the operation as a Ponzi scheme that devastated hundreds of investors, many of whom trusted Lubbock financial advisors with their retirement savings. The receiver appointed to oversee the wreckage of Ferrum Capital and its entities is asking a Bexar County judge to immediately freeze the assets of Joshua Allen, one of the company’s principals.
Defendant invoked Fifth Amendment more than 490 times
When Allen was deposed about the scheme, he refused to answer questions, invoking his Fifth Amendment right against self-incrimination more than 490 times.
Court documents include a portion of the transcript from that earlier deposition. Among the questions he refused to answer: whether Ferrum Capital was a Ponzi scheme, whether he pocketed approximately $13 million from investors, and whether he, together with Mike Cox and Brooklynn Chandler Willy, took in approximately $68 million from investors and if they ever intended to repay it.
Receiver claims millions in fraudulent transfers
In court documents, the receiver states his forensic accountant confirmed Ferrum Capital was a Ponzi scheme and that Allen received millions of dollars in fraudulent transfers from the scheme. The receiver also claims Allen caused $11 million in damages to the Ferrum companies and at least $50 million in damages to investors…