NEW YORK — A former trucking company owner has been sentenced to 212 months in prison after a federal conviction related to a $40 million Ponzi scheme.
According to a Nov. 28 news release from Damian Williams, U.S. Attorney for the Southern District of New York, Franklin Ray, 52, of Canton, Michigan, engaged in multiple fraud schemes, including two COVID-19 loan fraud schemes. He also committed aggravated identity theft in connection with one of those schemes.
U.S. District Judge Analisa Torres handed down Ray’s sentence.
In early March of 2022, the government seized the bank account of CSA Business Solutions LLC, and Ray was arrested, the news release states.
From the time between his arrest and indictment, authorities said that Ray continued to operate his truck investment scheme, hiding his arrest and the seized business bank account, then lying to his investors about why he missed a scheduled payment.
Ray also opened new bank accounts for CSA Business Solutions LLC while continuing to accept investor funds for non-existing trucks.
“In the span of less than two years, Franklin Ray engaged in four separate fraudulent schemes, including a $40 million Ponzi scheme that victimized hundreds of people and schemes that stole funds intended for those in need during the COVID-19 pandemic,” Williams said. “Ray even had the audacity to continue his Ponzi scheme while on pretrial release after his arrest in March 2022, stealing approximately $2 million from unsuspecting victims after he was charged with federal crimes. Today’s sentence shows that engaging in fraudulent conduct will have severe consequences.”
According to the complaint and indictment, along with other documents that were previously filed, in June of 2021, Ray began the truck investment scheme by offering people an opportunity to invest in his trucking and logistics company, which was named CSA Business Solutions LLC.
This led to investors entering into contracts with Ray, allowing his company to obtain and operate a truck for every $20,000 the investors contributed.
Ray told investors that the trucks would perform delivery services for a multinational e-Commerce company and a multinational shipping company, and that they would be entitled to 77% of the net income of the trucks.
However, CSA Business Solutions LLC operated few trucks and had minimal revenues from trucking activities, authorities said.
Investors in the scheme received payments from new investments into the same scheme or other sources. As the investors purchased the rights to CSA Business Solutions LLC’s trucks, Ray began sending them false updates purporting to show the performance of their trucks during the relevant period.
Overall, Ray was able to scam 275 people into purchasing more than 2,000 trucks by investing at least $40 million into his scam company.
Also, during the height of the COVID-19 pandemic, Ray obtained more than $1.9 million in Small Business Administration loan funds by falsifying and forging paperwork. These guaranteed loans were supposed to provide relief to small businesses during the pandemic. This scheme also included aggravated identity theft.
Another scheme that included a real estate company based in New York was induced, and $175,000 in startup costs was eventually paid for a joint venture between the company and his trucking business. Ray also reportedly lied on paperwork about his personal business experience and the business conducted by CSA Business Solutions LLC to get the company to enter the joint venture.
In addition to the 17-year prison term, Ray was sentenced to an additional five years of supervised release and ordered to forfeit $42,128,912.00 and several assets, including a 1968 Chevy Camaro.
The defendant was also ordered to pay restitution, which will later be determined.
Born and raised in Little Rock, AR, Erica N. Guy decided to stay in her hometown to begin her professional career in journalism. Since obtaining her bachelor’s degree from UAPB, Erica has professionally written for several publications about several topics ranging from lifestyle, tech, culture, and entertainment, just to name a few. Continuing her love for her hometown, she joined our team in June 2023, where she is currently a staff writer. Her career goals include continuing storytelling through her writing by being the best professional writer she can be. In her spare time, Erica enjoys trying new foods, cozying up with a good book, spending time with family and friends, and establishing herself as a future businesswoman.