A former Abingdon man has been running a Ponzi scheme for the past five years according to a civil complaint filed by the Securities and Exchange Commission against 59-year-old Mark Ray.
Ray, now a Colorado resident, was barred from selling securities in Illinois in 2005 after selling unregistered securities for a cattle company based in Abingdon.
The civil complaint filed in the U.S. District Court in Colorado last week says Ray has since 2014 run a fraudulent scheme in which he raised millions in investments for a cattle trading operation and marijuana business.
However, no cattle existed and the marijuana business was seriously hampered by debt.
The complaint says investors lost millions in Ray’s scheme. Ray was simply using money from new investors to repay prior investors.
A retired nurse from Galesburg, 67-year-old Reva Stachniw was named as a co-defendant, with court documents alleging she opened bank accounts and gave Ray permission to use them in, “whatever manner he wanted”.
The complaint reads that she signed many of the promissory notes sold and that without Stachniw, Ray would not have been able to run the scheme.
At one point $140 million was being run through the fraudulent accounts run by Stachniw and Ray every month.Ray would have investors send money to accounts controlled by him and would pay them back with accounts controlled by Stachniw or vice versa. This allowed them to evade detection by fraud departments of the banks.
The scheme collapsed in March 2019.
Ray has agreed to settle with the SEC, consenting to have his assets frozen and to allow the commission to decide how to take back profits although he admits to no wrongdoing in his settlement.
Stachniw has until later this month to respond to the complaint.
A Texas grand jury also indicted Ray in March 2018 on two felonies; theft by deception and false statement to obtain property.
The indictment alleged that Ray stole over $30,000 via a fraudulent cattle sale.
