A Charlotte investment adviser indicted for allegedly defrauding dozens of investors has agreed to plead guilty to securities fraud and tax evasion charges, according to an agreement filed in U.S. District Court in Charlotte.
A federal grand jury returned a criminal indictment in December 2016 charging Richard Wyatt Davis Jr., 41, with one count of wire fraud, two counts of securities fraud and three counts of tax evasion. The indictment accused him of taking money from investors in and around Charlotte and using it to repay other investors and to spend on personal items, including vacation homes, nannies, a personal chef and a groundskeeper.
To attract investors, he spoke at events for “preppers” and survivalists, targeting investors who feared the stock market and the banking system, prosecutors have said. His clients included professional athletes and people recruited at his church, the indictment states.
According to court documents filed Friday, Davis has agreed to plead guilty to one count of securities fraud and one count of tax evasion. If the court accepts the plea, prosecutors will move to dismiss the other counts in the indictment.
Between 2010 and 2015, Davis made misrepresentations to about 75 investors, costing them investments worth about $12.8 million, according to the documents. During that period, he made repayments of $3.5 million, resulting in a total loss to investors of $9.3 million, according to the documents.
Davis also failed to report income exceeding $10,000 in 2010 from criminal activity, the documents state.
A plea hearing has been set for this Friday at the federal courthouse in Charlotte before Magistrate Judge David Cayer. A spokeswoman for U.S. Attorney Andrew Murray and an attorney for Davis declined to comment.
According to the plea agreement, Davis faces a maximum of 20 years in prison and a $5 million fine for the securities fraud count. For the tax evasion count, he faces a maximum of five years in prison and a $250,000 fine.
The Observer first reported in 2015 that the U.S. Secret Service was investigating Davis for possible investment fraud. He initially pleaded not guilty to the charges in the indictment. Prosecutors and his lawyers have called the case one of the region’s most complex.
The criminal charges followed a civil action in June 2016 by the U.S. Securities and Exchange Commission in which the agency charged Davis with defrauding investors by secretly moving portions of real estate investments into transactions with companies he owned or operated himself.