CHESTERFIELD, VA (WWBT) - A former University of Virginia football standout and Philadelphia Eagle with roots in Chesterfield is now facing charges after he was arrested by authorities for his role in an investment scheme that caused over $8 million in losses to his clients.
According to the United States Department of Justice and Securities and Exchange Commission, 36-year-old Merrill Robertson, Jr. faces a possibility of two decades in prison if convicted on conspiracy to commit wire fraud charges in connection with a company started by Robertson and Sherman C. Vaughn, Jr. named Cavalier Union Investments, LLC.
"Between 2009 and 2015, Cavalier obtained at least $8 million from over 40 investors," according to U.S. Justice Department, with the SEC reporting he defrauded investors who included, "coaches he knew from his time playing football for the Fork Union Military Academy and the University of Virginia."
The Justice Department alleged Robertson made "material misrepresentations and omissions about the use of investor funds, the assets securing investor funds, and the investment vehicle into which investor funds would be deposited."
In addition, federal authorities said Robertson also signed promissory notes with many investors that "guaranteed a specific rate and return, pledged that investment funds were secured by tangible assets, and provided many investors with annual statements that misrepresented the value of their investment at the time and the account number where investment funds were supposedly located."
The SEC said the pair would tell clients their investments with Cavalier Union Investments, LLC "would yield as much as 20 percent, 'while providing safety and security for our investors.'"
"The defendants allegedly hid this fact from potential investors and relied on cash from new investors to stay afloat," the SEC said in a statement.
In a deposition with the SEC, The Justice Department said "Robertson acknowledged that Cavalier failed to pay back the approximately $8 million in principal invested with the company and stated that Cavalier currently has no income or assets," adding that he used investor funds to pay for personal expenses, such as his mortgage and car payments.
In a parallel action, the SEC announced civil charges against Robertson.
"Our complaint alleges that Robertson and Vaughn preyed on elderly victims and others who placed their trust in these individuals, only to have their savings stolen," said Sharon B. Binger, Director of the SEC's Philadelphia Regional Office. "We will continue to aggressively pursue fraudsters who exploit their relationship of trust with victims and promise returns that appear to be too good to be true."
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