ATLANTA — Two men are facing federal charges after being accused of running multiple Ponzi schemes that involved nearly $2 million in investor funds, according to federal prosecutors.
According to the U.S. Attorney’s Office for the Northern District of Georgia, Roosevelt Tobias “Toby” Bailey, 70, of Duluth, Georgia, and Alvin Jones, 58, of Tampa, Florida, were charged in an indictment that was returned Sept. 22. Jones was arrested and arraigned Tuesday.
Bailey was arrested and arraigned Oct. 16, officials said.
Prosecutors allege Bailey operated two fraudulent investment programs through his company, Borg Global, from October 2018 through October 2022.
“Bailey allegedly lured investors based on promises of massive returns and false assurances that their investments would be held in Jones’s trust accounts,” U.S. Attorney Theodore S. Hertzberg said. “But instead of safeguarding that money, Jones allegedly funneled it to Bailey, keeping a piece for himself, while investors lost their savings.”
The first program, known as Micro-Cap, promised investors that Borg Global would buy precious stones and metals overseas and resell them in the United States for a profit, effectively doubling their initial investments.
The second program, known as the Standby Letter of Credit program, promised returns of up to 16 times the initial investment within 30 to 90 days.
According to prosecutors, Bailey is accused of claiming the company could lease or monetize standby letters of credit from major banks or corporations. The financial instruments would supposedly be used as collateral for credit lines, with proceeds returned to Borg Global for distribution to investors, officials added.
Neither program used the money for its stated purpose, according to the indictment. Bailey allegedly diverted the funds to personal expenses and other accounts.
According to prosecutors, Bailey is accused of directing investors to send money to Jones’ attorney trust accounts, which are intended to hold client funds. Jones allegedly transferred the money to Bailey’s personal and business accounts, used some to pay earlier investors and kept a portion for himself.
Bailey received nearly $2 million in investor funds during the four-year period, prosecutors said. He stopped communicating with investors in October 2022, leaving them with substantial financial losses.
“Ponzi schemes prey on people’s trust and can devastate the lives of those who invest their hard-earned money believing it is secure,” FBI Atlanta Special Agent in Charge Marlo Graham said. “As alleged, Bailey and Jones used promises of extraordinary returns and the credibility of an attorney’s trust accounts to deceive investors and divert their money for personal gain.”
The indictment charges Bailey with seven counts of wire fraud, one count of conspiracy to commit money laundering and three counts of money laundering.
Jones faces one count of conspiracy to commit money laundering and three counts of money laundering, officials add.
The FBI is investigating the case with assistance from the Securities and Exchange Commission. Assistant U.S. Attorneys Bethany L. Rupert and Sara Lim are prosecuting the case.
