A Mecklenburg County man pleaded not guilty in federal court Wednesday to charges that he defrauded 100 victims of more than $19 million in a long-running investment scheme.
Richard Wyatt Davis Jr., 40, was arrested last week after a federal grand jury indicted him on wire fraud, securities fraud and tax evasion charges.
At a hearing Wednesday, U.S. Magistrate Judge David Cayer released Davis on a $25,000 bond, allowing him him to stay at his sister’s home in Huntersville with electronic monitoring.
The wire fraud charge alone carries a maximum sentence of 30 years in prison and a $1 million fine.
“This is a very serious case,” Assistant U.S. Attorney Jenny Sugar said during the hearing, adding: “The evidence is strong.”
According to the indictment, from 2005 until this year Davis defrauded investors of more than $19 million through various investment funds, including DCG Commercial Fund I and DCG Real Assets. Davis told investors that these were low-risk investments in real estate, precious metals and natural resources, serving as a safe alternative to the stock market, according to the indictment.
Davis assured investors that their money was growing, according to the indictment, but in reality he had diverted the majority of the funds to other entities he controlled and used the money to repay earlier investors and to enrich himself and his family. Davis used investor funds to make more than $2 million in personal expenditures, according to the indictment, including payments for his then-wife’s credit cards, nannies, a personal chef and vehicles.
According to the indictment, he often recruited investors who were fearful of the government and the banking system by speaking at “prepper” events. His victims also included professional athletes and people recruited through his church, the indictment says. Investors often rolled over their entire 401(k) retirement savings to Davis, according to court documents.
The Observer reported in August 2015 that the U.S. Secret Service was investigating Davis for possible investment fraud. And in June of this year, the U.S. Securities and Exchange Commission filed civil charges, alleging he breached his fiduciary duty and failed to disclose his self-dealing to all of his investors.
In the SEC case, a judge in June ordered Davis to repay “any ill-gotten gains” and to pay a civil penalty prescribed under securities laws. But at the hearing, Sugar said Davis has not fully disclosed his assets to the receiver handling the case.
Sugar filed an affidavit with the court from an attorney with the Grier Furr & Crisp law firm, which is serving as the receiver. The document listed various assets that Davis had failed to disclose, including proceeds from the sale of land in Lincoln County and gold mining equipment in Nevada.
During the hearing, Sugar also said it was important that Davis not have access to firearms while released, noting his “prepper” background. Davis’ attorney, Meghann Burke, said Davis and the family were clear that he should not be near any firearms.