More Fallout from Alleged Carr Miller Capital Ponzi Scheme

Las Vegas, NVIn addition to the investors who lost money in the alleged Carr Miller Capital Ponzi Scheme, there may be more fallout from New Jersey's actions against Carr Miller Capital. Charges have been filed against nominal defendants who may not have known about the alleged Ponzi scheme, but are still implicated because of their association with Carr Miller Capital.

Carr Miller Capital is accused of having operated a Ponzi scheme that defrauded investors of approximately $40 million. The defendants, Everett Charles Ford Miller, Ryan J. Carr and Brian P. Carr, are accused of using investor's money to fund their lavish lifestyle, including luxury vacations, automobiles and a New Jersey Devils skybox.

Now, other companies have been named nominal defendants because Carr Miller invested with them. According to Las Vegas Business Press (01/10/11), Indigo-Energy has been named in the lawsuit against Carr Miller because Carr Miller invested in Indigo-Energy. Although Indigo-Energy denies knowledge of wrongdoing on Carr Miller's part, the energy company was allegedly unjustly enriched by Carr Miller's actions.

Essentially, because the money invested by Carr Miller into Indigo-Energy was allegedly obtained through illegal means, Indigo-Energy may have benefited from illegally obtained money.

Indigo-Energy is reportedly helping the attorney general in its case against Carr Miller. Everett Charles Ford Miller, who was a principal at Carr Miller and was also on the board of directors for Indigo-Energy, was forced to resign from the board after Indigo-Energy entered an interim relief consent order with the attorney general.

According to an investigation into Carr Miller's actions, conducted by the New Jersey State Bureau of Securities, investors in New Jersey, Texas, Arkansas and North Carolina were sold promissory notes. Those notes were issued at interest rates of anywhere between 10 and 15 percent for nine-month terms. The lawsuit alleges that Carr Miller did not provide investors with material information about the investments and falsely represented to clients where their money would be invested.

Approximately $16 million of investors' money was placed in hedge funds, real estate ventures and film production companies. Investors say those investments were not authorized by or disclosed to them. Meanwhile, approximately $13 million was used by the defendants for personal purchases and $8 million went to pay out existing investors.