Ponzi scheme suspect flees into frigid California lake using underwater ‘sea scooter’
By Ryan Sabalow, Dale Kasler and Sam Stanton
The Sacramento Bee
November 16, 2020
A Shasta County man, wanted for his role in an alleged $35 million Ponzi scheme, briefly evaded FBI agents trying to arrest him Monday morning by swimming into the cold water of California’s largest reservoir using an underwater “sea scooter,” federal prosecutors said.
There, he stayed in the water for nearly 30 minutes using the Yamaha 350Li submersible device before he eventually resurfaced and was taken away in handcuffs. Sea scooters are motorized devices that pull users underwater at speeds of about 4 mph.
When FBI agents went to arrest Matthew Piercey, 44, of Palo Cedro near Redding on Monday, he hopped in a pickup and led them on a chase that went off-road twice, prosecutors said. He eventually stopped on the shoreline of Lake Shasta, north of Redding.
“Then, Piercey abandoned his truck near the edge of Lake Shasta, pulled something out of it, and swam into Lake Shasta,” federal prosecutors wrote in court documents calling Piercey a flight risk. “Piercey spent some time out of sight underwater where law enforcement could only see bubbles. He remained in the frigid water for approximately 25 minutes.”
When Piercey finally emerged from the lake, agents discovered he had grabbed the Yamaha scooter that allowed him to move around submerged.
Medics checked Piercey out and determined he didn’t need to be treated for hypothermia. Agents arrested him after he was allowed to put on some dry clothes the agents had gotten from Piercey’s wife.
Last week, a grand jury indicted Piercey and his business partner, Kenneth Winton, 67, of Oroville.
Prosecutors say that from about July 2015 through August, Piercey bilked investors into giving $35 million to his companies, Family Wealth Legacy and Zolla, promising guaranteed returns using an “Upvesting Fund” that allegedly was an algorithmic trading fund with a history of success.
Piercey is a member of the Bethel Church and used his connections at the prominent Redding megachurch to prey on fellow parishioners, a law enforcement source said.
Piercey allegedly admitted privately to an associate that there was no Upvesting Fund, prosecutors said. Piercey originally recruited Winton as an investor, but Winton eventually took on management responsibilities at Zolla.
In total, they paid back just $8.8 million to investors, according to the indictment.
They used other investor money for various business and personal expenses, including two residential properties and a houseboat. Few, if any, liquid assets remain to repay investors, prosecutors said.
Joshua Kons, a Hartford, Conn., lawyer who’s been contacted by investors who lost money with Family Wealth Legacy, said Piercey worked for years in a Chicago-area firm, headed by his father, that provides wealth-management and legal services. Then Piercey moved to California and teamed up with Winton to focus on wealth management.
Prosecutors said the California firms were supposedly investing clients’ money using a variety of strategies, including “cryptocurrency mining.”
“I don’t know they knew what they were doing with the crypto,” Kons said.
Facing years in prison
According to a filing with the Securities and Exchange Commission, Family Wealth was founded in 2016 and focused exclusively on well-to-do clients. The minimum investment: $50,000.
The company’s website lists offices in El Dorado Hills, Roseville, Walnut Creek, San Diego as well as Colorado and Illinois.
“At Family Wealth Legacy, we carry a consistent commitment to affluent families as they address the multifaceted demands of executing their wealth,” Winton says in a statement posted on the site.
The sister company, Zolla, also acquired funds in big gulps: A filing with the SEC last year said Zolla sold securities totaling $4.6 million to investors.
Prosecutors alleged Piercey also tampered with multiple witnesses by discouraging them from responding to grand jury subpoenas related to the investigation.
Piercey, who faces charges of wire fraud, mail fraud, money laundering, and witness tampering, is scheduled for his arraignment on Tuesday. Winton, who has been charged with conspiracy to commit wire fraud, is scheduled for his initial court appearance on Thursday.
If convicted, both Winton and Piercey face 20 years in prison and hundreds of thousands of dollars in fines.
“Mr. Winton voluntarily is coming before the court to defend these charges,” said Winton’s San Francisco attorney, Adam G. Gasner. “He looks forward to the judicial process shedding light on what actually occurred here.”
It’s not clear who Piercey’s attorney is. His family couldn’t be reached for comment.
In 2014, David Arnold Souza was sentenced in Shasta County Superior Court to 18 years in prison for stealing $650,000 from Bethel Church members in an investment scheme. Souza used the money for an $1,800-a-month rental Cadillac, more than $15,000 for dental work, meals, travel and a gym membership, according to the Redding Record Searchlight newspaper. Souza reportedly told investors he was guided by God in making investment decisions. His slogan: “Where business is moral and the miraculous is routine.
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