CHARLOTTE – Two Cornelius residents are facing federal charges in connection with a multi-million dollar investment scheme, announced Dena J. King, U.S. Attorney for the Western District of North Carolina April 22.
According to an article from the U.S. Attorney’s Office, a federal grand jury returned a criminal indictment this week against Marlin Hershey and Dana Bradley, both 52, charging them with mail and wire fraud conspiracy, mail fraud, securities fraud and money laundering conspiracy. The indictment was unsealed following Hershey’s appearance in court Friday.
N.C. Secretary of State Elaine F. Marshall and Robert R. Wells, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, joined U.S. Attorney King in making the announcement.
According to allegations contained in the indictment, from approximately 2009 to 2021, Hershey and Bradley induced dozens of victims to invest millions of dollars in unregistered securities offerings, promoted by the defendants through Performance Holdings and other entities controlled by the defendants and other individuals, including Performance Retire on Rentals LLC, Distressed Lending Fund LCC, Moteng Funding LLC and Southeast Lot Acquisitions LLC.
The indictment alleges that the investment materials Hershey and Bradley provided to victim investors in connection with these securities offerings contained false and/or misleading statements and failed to disclose material information. For example, the indictment alleges that the offering materials failed to disclose that the defendants received commissions based on the amount of investments they sold, and often provided investors with offering materials that represented the opposite – that nobody would be paid a commission in connection with the investments.
According to allegations in the indictment, as part of the scheme, Hershey and Bradley also failed to disclose to investors other material information, including negative information about the defendants’ backgrounds and the financial woes faced by some of the entities for which they were soliciting investments. To the contrary, because the defendants often solicited the same group of investors to invest in the various projects, the defendants took steps to conceal such financial difficulties by making undisclosed loans to various entities so that the entities could, in turn, make their required interest payments to investors.
The Security and Exchange Commission filed a complaint against Bradley and Hershey, and several companies they own, with the U.S. District Court in Charlotte in 2019.
Hershey was released on bond following his court hearing. Bradley had his first court appearance on Monday. The mail and wire-fraud conspiracy charge and the mail-fraud charge each carry a maximum prison term of 20 years and a $250,000 fine. The securities-fraud charge carries a maximum prison term of 20 years and a $5 million fine. And the maximum prison term for money laundering conspiracy charge is 10 years and a $500,000 fine.