The owner of a Wetzel County consumer lending company has agreed to plead guilty to charges that she bilked investors out of up to $25 million as part of a Ponzi scheme, federal authorities said Wednesday.
Donna S. Brown, who ran Budget Finance Co. out of a New Martinsville storefront, was charged with money laundering, wire fraud and mail fraud.
Over the past decade, Brown lured Ohio and West Virginia consumers into investing with Budget Finance, promising annual returns of between eight percent and 12 percent, authorities said. At least 25 investors lost money in the scheme.
"For years, Donna Brown preyed upon investors and defrauded them out of their hard-earned money in order to support her personal lifestyle," said Robert Johnson, an FBI agent based in Pittsburgh. "As a result of the scheme devised by Brown, many of the victims lost everything, including their livelihoods and the retirement savings they worked throughout their lives to secure."
A plea agreement and "bill of information" were filed Wednesday, indicating Brown, 65, will admit to the crimes.
As part of the scheme, Brown mailed investors fraudulent investment statements. She also mailed investors federal tax forms to fill out, but never forwarded the forms to the IRS.
Budget Finance closed abruptly in November 2015. New Martinsville residents, who had known Brown for years and trusted her, have said the company's sudden demise blindsided them. Budget Finance had been in business since the 1970s.
Many investors had tens of thousands of dollars tied up in Brown's business, the Gazette-Mail reported in December.
"Because no substantial investment source existed to account for well over 800 investment accounts with investments exceeding $31 million, she used money from new investors to pay the existing ones," said U.S. Attorney Benjamin Glassman of Ohio's Southern District. "This type of scheme is known as a Ponzi scheme."
Brown, who lives in Clarington, Ohio, faces a maximum sentence of 20 years in federal prison and a $250,000 fine for each charge.
Investors bilked by Brown can monitor the case at www.justice.gov/usao/ohs by clicking on the tab marked "Budget Finance Company, Inc."
The West Virginia State Auditor's Office, Attorney General's Office, state Division of Financial Institutions, and Wetzel County Prosecuting Attorney's Office assisted with the investigation
Reach Eric Eyre at ericeyre@wvgazettemail.com, 304-348-4869 or follow @ericeyre on Twitter.