A Moore County man has agreed to plead guilty to charges of securities fraud. U.S. Attorney Anne Tompkins said 58-year-old James Alexander Shepherd of Vass was charged with one count of fraud following an investigation by the Federal Bureau of Investigation (FBI), Charlotte Division.
According to court documents, from 2006 through early this year, Shepherd defrauded more than 100 investors in Union County and elsewhere of about $6 million by promising victims returns on their investments in funds he owned and controlled, including “The Shepherd Major Play Option Fund” and the “Shepherd’s Model Hedge Fund”. Court records show that in about 2006, Shepherd began misappropriating money from the Major Play Fund for other purposes, including paying investors of the hedge fund and to support his personal lifestyle.
Documents indicate that Shepherd built a $2 million residence near Vass, N.C. and used investor money to make the mortgage payments.
Prosecutors say the scheme came to light when Shepherd’s independent auditor requested – and was denied – deeper access into bank records. The accountant alerted the National Futures Association of the situation, which triggered the FBI investigation.
According to court records, Shepherd had supplied the accountant with fictitious banking information, including a false name and a mailing address and fax number controlled by Shepherd himself. Investigators say when the accountant would send a letter of inquiry, Shepherd would secretly receive it and reply with forged documents.
The defendant’s initial court appearance and plea hearing have not been set, but it is known that he will face a maximum of 20 years in prison and a $5 million fine. As part of his plea agreement, Shepherd has agreed to pay full restitution to his victims. He will also have to forfeit property involved in the offenses.
The U.S. Commodities Futures Trading Commission has also filed a civil enforcement action against James Shepherd.