Ponzi Scheme Suspect Uses Underwater Scooter to Flee F.B.I.

When the authorities went to arrest Matthew Piercey on Monday for what they mentioned was his position in operating a $35 million Ponzi scheme, he took off in his truck and led them to Shasta Lake, the most important man-made reservoir in California.

Tracked by air and trailed by F.B.I. brokers and members of the California Highway Patrol, Mr. Piercey, 44, of Palo Cedro, Calif., was seen eradicating one thing from his truck and getting into the frigid water with it in his avenue garments, the authorities mentioned. After about 25 minutes within the lake, a part of which he spent submerged, a really chilly and moist Mr. Piercey emerged and was arrested, the Justice Department mentioned.

The brokers allowed him to turn into dry garments that that they had obtained from his spouse earlier than escorting him to the closest F.B.I. area workplace, in Sacramento, the division mentioned.

Mr. Piercey’s pink Yamaha 350Li, an underwater sea scooter, was taken as proof, the authorities mentioned. The commercially accessible, battery-powered scooter has an enclosed propeller that may pull a diver underwater at just below 4 miles per hour, a lot quicker than people can transfer with fins.

It was not clear how lengthy Mr. Piercey was underwater. Neither the F.B.I. nor the Justice Department answered questions on whether or not he used a snorkel or any sort of scuba gear to keep submerged.

The Justice Department famous in a detention memorandum, nevertheless, that Mr. Piercey “spent some time out of sight underwater where law enforcement could only see bubbles.”

Mr. Piercey was accused in a federal indictment of operating a Ponzi scheme that bilked buyers out of roughly $35 million between 2016 and earlier this 12 months via two corporations he helped run, Family Wealth Legacy and Zolla Financial.

Family Wealth Legacy solicited investments in securities, cryptocurrency mining and life insurance coverage, the indictment says. Zolla Financial raised funds via transactions that “were typically styled as loans offering a fixed return, with the company’s returns purportedly generated through algorithmic trading,” in accordance to the Justice Department.

“Piercey often paid off his lines of credit, credit cards, and personal and business expenses with investor funds, and his companies did not generate revenue sufficient to cover overhead and expenses while still paying investors the returns they were promised or otherwise led to expect,” the Justice Department mentioned within the detention memorandum.

The Justice Department mentioned Mr. Piercey had a sample of paying outdated buyers with cash he raised from new buyers “while making various false and misleading statements, half-truths, and omissions” to disguise his “constant downward financial spiral.”

Mr. Piercey faces 31 felony counts, together with wire fraud, mail fraud, witness tampering and cash laundering. Each depend carries a most penalty of 20 years in jail.

A colleague of Mr. Piercey’s, Kenneth Winton, 67, of Oroville, Calif., was charged individually on Monday with a single depend of conspiracy to commit wire fraud.

Messages left with David Fischer, a lawyer representing Mr. Piercey, weren’t instantly returned. Adam Gasner, a lawyer for Mr. Winton, mentioned in a press release that his shopper “was made aware of these allegations and will immediately and voluntarily appear in court.”

“Mr. Winton is a family man with no prior criminal record and wishes to address the conduct alleged to have been committed by him and not be prejudiced by the actions of others charged in this case,” Mr. Gasner mentioned.

Josh Kons, a lawyer who represents buyers in securities fraud issues, mentioned he was surprised by Mr. Piercey’s try to elude legislation enforcement.

“You never really know what people are thinking about when they get indicted or when the F.B.I. tries to bang down their door, but certainly this one goes down in the books,” mentioned Mr. Kons, who has consulted with individuals who say they misplaced cash to Mr. Piercey. “I don’t know if we’ll ever see a more novel escape attempt by a Ponzi scheme artist again.”

The audacity of Mr. Piercy’s run from the legislation, Mr. Kons mentioned, shouldn’t obscure the human prices of this sort of fraud.

“Ponzi schemes really hurt people,” he mentioned. “It’s fairly rare that victims get more than pennies on the dollar at all, and it certainly seems that these people may suffer a complete loss.”