DULUTH, Ga. — A Duluth investment broker and a Florida attorney were arrested and arraigned in federal court, accused of running two multi-year Ponzi schemes that defrauded investors of nearly $2 million by the U.S. Department of Justice.
The U.S. Attorney’s Office said Roosevelt Tobias “Toby” Bailey, 70, of Duluth and Alvin Jones, 58, of Tampa, Fla. face federal fraud and money laundering charges in connection with investment programs operated through Bailey’s company, Borg Global.
Federal prosecutors said Bailey is accused of operating the schemes for four years, from October 2018 through October 2022 by promising investors extraordinary returns through international metal trades and bank standby letters of credit.
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Instead of investing the money as promised, Bailey instead allegedly used the funds to pay for personal expenses and directed investors to deposit payments into attorney trust accounts controlled by Jones.
The first alleged scheme, known as the Micro-Cap program, promised that Borg Global would pool investor funds to purchase precious stones and metals outside the United States.
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According to federal prosecutors, Bailey told investors the materials would be resold for a higher price within the U.S., effectively doubling their initial investments.
The second scheme involved a Standby Letter of Credit program that promised returns of up to 16 times the principal investment within 30 to 90 days.
Prosecutors said Bailey claimed his company could lease or monetize letters of credit from major financial institutions to use as collateral for credit lines.
Instead of placing the funds into the promised investment programs, Bailey directed investors to send their money to interest on lawyer trust accounts managed by Jones.
Jones then transferred the funds to Bailey’s personal and business accounts, prosecutors said, and used money from new investors to pay prior investors, keeping a portion for himself.
In October 2022, the USAO said Bailey ceased communication with investors after receiving nearly $2 million over four years.
A federal grand jury indicted both men in September.
Bailey faces seven counts of wire fraud, one count of money laundering conspiracy and three counts of money laundering, while Jones is charged with one count of money laundering conspiracy and three counts of money laundering.
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