The Texas State Securities Board (TSSB) recently announced that Mays, a former investment adviser in Corpus Christi, Texas has received a 20-year prison sentence after being convicted on securities fraud and theft charges.
Mays was sentenced to 20 years for fraud and 10 years for theft in the 214th State District Court of Nueces County. He will serve the sentences concurrently. He was also ordered to pay $102,117 in restitution and pay $20,000 in fines.
Mays sold investments in gold, silver, and commodities, promising clients annualized returns of between 6 percent and 18 percent. However, very little of the $225,000 he raised from investors was used to trade commodities. Most of the money was spent on personal expenses including child support, payment to a credit card company to settle a lawsuit for nonpayment, restaurants, grocery bills, housecleaning services and pool maintenance.
According to the TSSB, Mays made some payments to investors, but only as part of a Ponzi scheme–one investor who received most of his money back was paid with funds from another investor. In most cases investors received only a small fraction of the funds they put into the operation.
Mays had legal and financial troubles before he launched the commodities trading scam, but didn’t disclose them to investors as required by law. In 2011, Mays was hit with a $42,924 tax lien from the IRS as well as a $20,289 final judgment in a civil court case.