Palo Cedro man pleads guilty to charges stemming from $35 million fraud scheme
A 48-year-old Palo Cedro man pleaded guilty in federal court on Thursday to charges stemming from a $35 million investment fraud scheme, according to the U.S. Department of Justice.
Matthew Piercey pleaded guilty to 27 counts of wire fraud, concealment money laundering and witness tampering, acting U.S. Attorney Michele Beckwith said in an announcement from the DOJ issued Thursday.
Piercey ran a fraud scheme, a sort of Ponzi scheme, between July 2015 and August 2020, during which he sold funds in his investment companies, Zolla Financial LLC and Family Wealth Legacy LLC. Family Wealth Legacy. He 'made a variety of false and misleading statements to investors about the companies' financial stability and successes, Beckwith said in the announcement.
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When Piercey found out he was under investigation, he tried to discourage subpoenaed investors and witnesses from responding to the grand jury, according to court documents, the announcement said.
As of May 15, Piercey paid back approximately $8.8 million of the $35 million he convinced people to invest, Beckwith said, adding he used the rest of the money to buy two residential properties, pay personal and business expenses and fund his defense, according to court documents.
Piercey faces up to 20 years in prison and fines 'up to $250,000 or twice the gross gain or loss, whichever is greater' for each count of wire fraud and mail fraud, and for each witness tampering count. He also faces up to 20 years in prison and a similar fine up to $500,000 for each count of money laundering, according to Beckwith.
More: One of two accused in $35 million North State Ponzi scheme pleads guilty
Piercey and Kenneth Winton of Oroville operated Zolla Financial when they were arrested in 2020, according to the U.S. Attorney's Office in Sacramento.
Piercey first allegedly contacted Winton as an investor, then recruited him to raise money from investors, according to court documents.
Winton pleaded guilty on Dec. 3, 2020, to conspiracy to commit wire fraud in connection to the case, according to the attorney's office.
In March, 2020, after he learned investors were sent grand jury subpoenas, Piercey sent letters to investors claiming the subpoenas were due to 'his outreach to the president (Trump) with a bold proposal to rescue the country's banking system,' court documents said.
Banks worldwide could face "global financial shock" and 'The only way out is for Banks to open Zolla accounts and stop the bleeding,' Piercey allegedly wrote in the letter.
'In light of our emboldened focus to rescue the banking system, be advised I anticipate potential new levels of regulatory scrutiny. If you have any connections or contact with government workers please let me know,' according to an excerpt of the letter included in court documents.
When law enforcement came to arrest him on Nov. 16, 2020, Piercey led them on a vehicle chase through a Redding neighborhood, ending at Lake Shasta, north of Redding.
Piercey abandoned his car, jumped into the lake and used an underwater hand-held seascooter, a Yamaha 350LI, to try to escape. Officers followed his bubble trail on the lake's surface for approximately 35 minutes, at which time Piercey came up out of the water. Officers arrested him and took him into custody, according to court documents.
Damon Arthur contributed to this story.
Jessica Skropanic is a features reporter for the Record Searchlight/USA Today Network. She covers science, arts, social issues and news stories. Follow her on Twitter @RS_JSkropanic and on Facebook. Join Jessica in the Get Out! Nor Cal recreation Facebook group. To support and sustain this work, please subscribe today. Thank you.
This article originally appeared on Redding Record Searchlight: Palo Cedro man pleads guilty to charges related to $35 million scheme
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