Lake Norman mansion owner swindled millions of dollars from investors, feds say
A Lake Norman mansion owner schemed with the owner of a slightly less ostentatious lakefront home to steal millions of dollars from unsuspecting investors, according to federal documents and public land records.
Marlin Hershey and Dana Bradley coaxed dozens of victims to invest in unregistered securities, U.S. Attorney Dena King said in announcing federal charges against the 52-year-old Cornelius residents on Friday.
The men are accused of promoting the securities through Huntersville-based Performance Holdings and several limited liability companies they and unnamed others controlled, according to a criminal indictment returned by a grand jury in U.S. District Court in Charlotte on Tuesday.
Hershey and Bradley collected millions of dollars in undisclosed commissions from the sale of the securities, which they concealed from their investors, according to court documents. The undisclosed commissions, typically 10% of an investor’s initial investment, violated federal securities laws, prosecutors said.
Promotional materials the men gave prospective investors said the opposite, “that nobody would be paid a commission in connection with the investments,” according to a news release by King’s office on Friday.
The men also took regular undisclosed “management” fees from their various entities, according to the indictment.
Hershey and Bradley used money from new investors to repay loans and previous investors, prosecutors said.
Investments in ‘financially distressed’ projects
They also failed to include negative results in status reports to investors, according to the indictment.
In 2019, investors learned that projects in which Hershey and Bradley invested their money “were in financial distress and could no longer meet their obligations to investors, which totaled several million dollars,” according to the U.S. Attorney’s Office news release.
The indictment charges the pair with mail and wire fraud conspiracy, mail fraud, securities fraud and money laundering.
Hershey and Bradley didn’t return messages left by The Charlotte Observer on their cell phones Friday night.
Lake Norman waterfront homes
The men live in one of the Charlotte market’s most exclusive, high-priced areas: the mansion-lined shores of Lake Norman in Cornelius.
Hershey and his wife, Wendy, live in a $1.7-million, 6,465-square-foot mansion on Fisherman’s Rest Court, off Jetton Road at the tip of a peninsula, Mecklenburg County public records show.
Bradley and his wife, Robin, own a $794,300, 4,651-square-foot waterfront home on Waterview Drive, according to public records.
Their scheme lasted from 2009 to 2021, according to the indictment, which doesn’t name the victims.
Undisclosed investment troubles
Hershey and Bradley have checkered investment pasts, but never told their investors, prosecutors said.
According to the indictment, the federal Securities and Exchange Commission charged Hershey in the 2000s with insider trading that violated securities laws. The indictment doesn’t mention the outcome of the charge.
Bradley never revealed that an investor in a real estate project sued him and Performance Holdings in 2009 “alleging misrepresentation and unfair and deceptive trade practices,” according to the indictment
$7.5 million forfeiture judgment sought
Hershey was released on bail after a court appearance Friday, prosecutors said.
Bradley’s first court appearance is scheduled for Monday, according to King’s office.
The charges carry a combined total of up 70 years in prison.
Prosecutors said they’ll also seek a forfeiture judgment of at least $7.5 million against the men.
On Friday, King thanked the FBI and the securities division of the N.C Secretary of State’s office for leading the investigation.
N.C. Secretary of State Elaine Marshall and Robert Wells, special agent in charge of the FBI Charlotte division, joined King in Friday’s announcement of charges in the case.
This story was originally published April 23, 2022 at 8:32 AM.