To trick his investors into awing his astonishing investment skills, Texas-based Michael Edgar Cone liked to draw attention to his high-end Rolex watches, designer clothes, lavish dining habits as well as to his wheels, a 2017 Bentley Flying Spur and a 2015 Rolls Royce Wraith.
Cone claimed he’d successfully run a business for 12 years, operated private equity offices in three states, paid 271 investors ridiculous 24 percent annual returns, raised as much as $152 million and partnered in his cannabis-related business with a retired agent from the Drug Enforcement Administration.
All of those lines uttered in conversations or printed in written communications were lies, according to the FBI.
To thwart his targets from discovering his criminal record, non-existent investment experience and that he was living luxuriously off his scam, Cone—who was born in 1981—used aliases including Bryan Driscoll, Brian Gwinn, Michael B. Weinflash and Brian Wilson Kipp.
In truth, he’d risen to an unceremonious rank in the cannabis industry: marijuana courier.
But his cold-call Ponzi scheme worked so well that at least 60 wealthy investors in 26 states gave the con artist around $4 million during a seven-month period that ended in March 2018.
Even after a law enforcement raid of his property, the Dallas-area man managed to swindle another $400,000 in less than two weeks using his Greenview Investment Partners L.P. and Greenfield & Wright LLC.
Contributing to his downfall, the defendant unwittingly solicited an Orange County investor, who was in reality an undercover FBI special agent working on white-collar crime investigations.
All of Cone’s deeds and arguments for punishment reductions are unknown because inside Ronald Reagan Federal Courthouse in Santa Ana U.S. District Court Judge David O. Carter sealed a huge portion of the case from public scrutiny, including portions of a sentencing hearing.
What is known? This month Carter punished Cone with a term of 41 months in federal prison and ordered the McKinney, Texas resident to pay more than $3.9 million in restitution.
The Securities and Exchange Commission warns investors, whether in the cannabis industry or not, to thoroughly investigate proposals and the individuals offering them.
Orange County is frequently a prized scam territory given the number of multi-millionaires who live here and crave investment returns greater than the lousy terms offered by traditional banks.
R. Scott Moxley’s award-winning investigative journalism has touched nerves for two decades. An angry congressman threatened to break Moxley’s knee caps. A dirty sheriff promised his critical reporting was irrelevant and then landed in prison. The U.S. House of Representatives debated his work. Federal prosecutors credited his stories for the arrest of a doctor who sold fake medicine to dying patients. Moxley has won Journalist of the Year honors at the Los Angeles Press Club; been named Distinguished Journalist of the Year by the LA Society of Professional Journalists; and hailed by two New York Times Magazine writers for his “herculean job” exposing Southern California law enforcement corruption.