Crime & Courts

Charlotte judge sentences Ohio man to 21 years for Ponzi scheme

An Ohio man, described by a federal judge as “driven by greed the court rarely sees,” has been sentenced to 21 years in prison in Charlotte.

Jonathan Davey, 50, of Newark, Ohio, became the last of 11 defendants punished in the $40 million “Black Diamond” Ponzi scheme.

At Davey’s sentencing Thursday, U.S. District Judge Robert Conrad focused on how Davey’s actions caused “life-wrecking damage” to the scheme’s elderly and vulnerable clients. In February 2013, a jury deliberated only 45 minutes before finding Davey guilty of tax evasion, and conspiracy to commit money laundering and securities and wire fraud.

Davey, a CPA and certified investment adviser, played a key role in the scheme that authorities say took $40 million from some 400 victims.

According to prosecutors, Davey pocketed more than $11 million with his own hedge fund by falsely claiming that he had checked out Black Diamond and found it legitimate. Davey also operated a phony website that grossly exaggerated the fund’s holdings.

Documents filed in the case indicate that the defendant funneled client money to an offshore shell company in Belize that he later used to build a mansion in Ohio.

In the end, Conrad gave Davey the second longest prison sentence of all the defendants, trailing only the 40 years Black Diamond founder Keith Simmons received in December. The other nine will serve terms ranging from six months to 15 years.

“There are real-life consequences of evil present in this case,” Conrad said at the sentencing, “and the defendant was personally responsible for those consequences.”

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