Florida Businessmen Plead Guilty To $19M Ponzi Scheme

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Florida Businessmen Plead Guilty To $19M Ponzi Scheme

Donald Ray Babb of Merritt Island, Florida and Ralph Ruth of Melbourne, Florida pleaded guilty earlier this week to conspiracy to commit wire fraud in connection to a Ponzi scheme they ran that defrauded local investors out of almost $19 million. The alleged co-conspirators each face a maximum sentence of twenty years in federal prison.

Babb and Ruth are alleged to have collected cash to pay other investors as well as purchasing real estate and other luxury items for themselves. The U.S. Department of Justice is asking for restitution in the amount of $18.7 million and the forfeiture of a number of properties, including houses in Melbourne, Merritt Island, and North Carolina.

The co-conspirators are believed to have done business as Southeast Mutual Insurance and Investment LLC, Capstar Industries LLC, and First Merchant Capital LLC and falsely represented their businesses as licensed financial institutions whose deposits were insured by the Federal Deposit Insurance Corp. The two used these businesses to advertise risk-free certificates of deposit investment opportunities that yielded high rates of return. Yet, neither of the two bought any such certificates.

Prosecutors believe that the scheme started in June 2006 and continued until December 2013 and that the scheme primarily targeted elderly investors. In total, 181 victims lost $18.7 million with a number of victims losing their entire life’s savings.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.

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