LOS ANGELES – The former president and CEO of the Sherman Oaks-based Morgan Peabody, Inc. brokerage firm plead guilty to federal wire fraud charges stemming from a real estate investment scam that resulted in about five dozen investors losing nearly $4 million, officials announced Tuesday.
David Williams, 54, of Studio City, a licensed securities dealer and investment adviser, plead guilty Monday. Williams decided to plead guilty in the middle of a jury trial to three counts of wire fraud and two counts of tax evasion, according to authorities.
U.S District Judge Dale Fisher is scheduled to sentence Williams on September 28. He faces up to 70 years in federal prison.
The fraud took place between June 2007 and April 2008, officials said.
Between June 2007 and April 2008, Williams fraudulently obtained more than $3.75 million from approximately 60 investors as a result of the Sherwood Fund offering.
In a plea agreement,Williams admitted that he did the following things:
- He directed Morgan Peabody representatives to sell securities in a fund that Williams personally had created to invest in real estate, according to authorities.
- The Sherwood Secured Investment Fund, LLC, a Studio City business that Williams owned, offered a 9 percent annual return on investments.
- Williams used the majority of investor money from the Sherwood Fund to pay for personal expenses, including a lease on a $6 million residence in Toluca Lake.
- Williams also admitted that he failed to file returns with the IRS for tax years 2007 and 2008, and failed to report more than $2.3 million in income he received.
- Williams has agreed to pay additional taxes of $777,881 for those tax years, as well as the penalties and interest.