Attorney General James Announces Conviction of Madison County Tax Preparer for Running Decades-Long Ponzi Scheme

NEW YORK – New York Attorney General Letitia James today announced the conviction of Miles Burton Marshall, a Madison County tax preparer and insurance agent, for operating a massive Ponzi scheme that fraudulently stole more than $50 million from 988 investors in Madison County and other nearby counties. Marshall convinced unsuspecting clients to invest millions of dollars into his so-called “Eight Percent Fund,” claiming that their funds would be primarily used for real estate investments. Instead, Marshall used these funds to pay investment returns to prior investors and to cover the expenses of his other businesses and his personal expenses. Marshall also spent his investors’ funds on shopping, vacations, and trips to restaurants. Today, Marshall pleaded guilty to Grand Larceny in the Second Degree, Securities Fraud under the Martin Act, and Scheme to Defraud in the First Degree, and will be sentenced to four to 12 years in prison. As part of his guilty plea, Marshall must enter judgments in favor of the victims, including principal and interest totaling approximately $90 million.

“Miles Burton Marshall scammed his clients out of their life savings and used their hard-earned money to fuel a classic Ponzi scheme,” said Attorney General James. “My office will not tolerate anyone who breaks the law and misleads investors to line their own pockets. I thank the New York State Police and our partners in law enforcement for their work to secure this conviction and help those who were cheated get their money back.”

“Today’s conviction is verification that we will not tolerate the actions of those willing to misguide and victimize unsuspecting individuals for money,” said New York State Police Superintendent Steven G. James. “Mr. Marshall thought only to enrich himself at the expense of others, with no regard to their well-being. This complex, long-term investigation would have been impossible without the cooperation of our members, partners at the Attorney General’s Office and Criminal Enforcement and Financial Crimes Bureau.”

Today’s guilty plea is the result of a long-term investigation led by the Office of the Attorney General’s (OAG) Criminal Enforcement and Financial Crimes Bureau (CEFC). Beginning in the early 1990s and continuing through March 2023, Marshall solicited potential investors, including his tax and insurance clients, to invest tens of millions of dollars into his so-called “Eight Percent Fund.” Marshall told investors that their funds would be primarily used to purchase property, refurbish rental houses, and pay expenses for rental properties. When soliciting investments, he falsely represented the profitability of his real estate business, claiming it was so profitable that he could promise investors eight percent yearly returns.

After soliciting investments, Marshall used investors’ money to pay investment returns to prior investors and finance operating expenses for his other businesses. Marshall also spent hundreds of thousands of dollars from his investors on personal expenditures, including travel purchases at American Airlines, Priceline, and United Airlines, at retail and online stores such as Amazon, Lululemon, and Target, and at grocery stores, restaurants, and yoga studios.

To further his scheme, Marshall directed his staff to generate fake “Transaction Summaries” for investors, falsely representing their account balances and the interest they purportedly earned. Marshall’s investors relied on these false statements, believing they were earning a steady income, and continued to invest. As a result of Marshall’s investment scheme, many investors lost their life savings.

The investigation revealed that by 2016, Marshall’s total liabilities exceeded his assets by over $40 million. Still, he continued to solicit new investors and tell prior investors that their investments were profitable. Eventually, Marshall could no longer repay investors and filed for bankruptcy. In bankruptcy proceedings, Marshall made sworn statements that as of March 2023, his total assets were less than $22 million, and he owed 988 victim investors over $90 million, which included the principal they invested as well as accrued interest.

Marshall pleaded guilty today before Judge Rhonda Youngs to Grand Larceny in the Second Degree, Securities Fraud under the Martin Act, and Scheme to Defraud in the First Degree. Marshall is scheduled to be sentenced on June 11 to four to 12 years in state prison, and will also enter into judgments in favor of his 988 victims totaling approximately $90 million.

Attorney General James thanks the Financial Industry Regulatory Authority (FINRA) and its Criminal Prosecution Assistance Group, the U.S. Securities and Exchange Commission, and the New York State Police for their invaluable assistance in this investigation. Attorney General James also thanks the Office of the United States Trustees, the Village of Hamilton Police Department, the Madison County Real Property Tax Services Department, and the Madison County District Attorney’s Office for their assistance.

This case is being prosecuted by CEFC Assistant Attorneys General Andrew Tarkowski and Eleanor Biggers, with assistance from Assistant Attorney General Sean Bunny. Analytical work was provided by CEFC Senior Legal Analyst Joseph Conniff, under the supervision of Chief Analyst Jayleen Garcia. Forensic accounting was conducted by Principal Auditor Investigators Brenna Magruder and Danielle Dudley, under the supervision of Chief Auditor Kristen Fabbri and Deputy Chief Auditor Sandy Bizzarro of the Forensic Audit Section. CEFC is led by Bureau Chief Stephanie Swenton and Deputy Bureau Chief Joseph G. D’Arrigo.

The criminal investigation was conducted by Senior Detective Joel Cordone, under the supervision of Deputy Chief Juanita Bright, Assistant Chief Samuel Scotellaro, and Detective Supervisor Peter Fitzgerald of the Major Investigations Unit. The Investigations Bureau is led by Chief Investigator Oliver Pu-Folkes. Both CEFC and the Investigations Bureau are part of the Division for Criminal Justice, which is led by Chief Deputy Attorney General Jose Maldonado and overseen by First Deputy Attorney General Jennifer Levy.