Statesville man indicted in connection with $44M Ponzi scheme

abell@charlotteobserver.com mgordon@charlotteobserver.comDecember 19, 2013 

A Statesville man has been indicted by a federal grand jury in connection with a $44 million Ponzi scheme that defrauded more than 200 people, federal authorities said Thursday.

Daniel Harold Williford, 55, was indicted Wednesday on one count of securities fraud, one count of wire fraud and five counts of money laundering. The indictment also includes a forfeiture notice seeking a monetary judgment of $44 million.

“Let me make it simple: You rip people off, you get indicted,” U.S. Attorney Anne Tompkins said in a statement.

One Charlotte man told the Observer that he gave $25,000 to Williford in 2007, with the understanding that he’d receive $30,000 in three months. As recently as a few months ago, he said Williford still was promising to pay him $100,000 on his original investment.

He says he lost $20,000 overall, money that wiped out his savings and threw him into credit card and other types of debt from which he’s still digging out.

“Looking back, he was just so slick,” said the investor, who asked that his name not be used “so people all over Charlotte don’t know how stupid I am.”

“Dan always had an answer. The money was in escrow or it was with the lawyer or it was coming next week. Now I wonder why I ever believed him over all those years. But you reach the point where you’re asking yourself, ‘What can I do?’ 

According to allegations in the federal indictment, Williford induced more than 200 investors in Charlotte and elsewhere to invest more than $44 million between January 2007 and July. He promised them their money would be invested in wireless Internet equipment, Internet towers and other facilities and companies, according to the indictment.

More than 100 investors lost $20 million, the indictment stated. Williford only invested $7.7 million of the $44 million he raised, and he used the rest to support his scheme and his lifestyle, the indictment said. It said he induced victims to invest in Velocenet, Broadband Leasing, Connect Inc. and related entities he controlled.

In one example included in the indictment, Williford persuaded a client to invest $123,000 in 2007, supposedly to underwrite one of Williford’s companies in Boone. Instead he routed the money through four of his other business accounts, then used most of it to pay himself and other investors.

According to the indictment, that process was repeated again and again. In all, Williford used 72 percent of his investments, $32 million in all, to make Ponzi payments to other investors or loan payments to banks.

Williford’s promise of quick and large returns spread from friend to friend and family member to family member, the Charlotte investor told the Observer.

“For years, Daniel Williford swindled hundreds of people, including his own co-workers, out of their hard-earned money,” said John Strong, special agent in charge of the FBI in North Carolina, whose agency investigated the case.

If convicted, Williford faces up to 20 years in prison for each of the securities and wire fraud counts, and up to 10 years in prison for each of the money laundering counts.

Williford pushed wireless Internet early on. A 2002 story in the Observer detailed how Williford had started Velocenet to bring the service to Statesville, Charlotte and the surrounding area. He said he planned to install wireless hot spots in malls, retail centers, even car shops and a local newspaper, and had started to meet with potential partners to raise needed capital.

In addition to the penalties announced Thursday by Tompkins, records indicate that Williford personally owes the Internal Revenue Service some $155,000 while his companies have unpaid judgments of $1.5 million. Researcher Maria David contributed

Gordon: 704-358-5095 Bell: 704-358-5696; Twitter: @abell

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