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Maryland 'Pastor' Convicted For Targeting Religious Investors In $28 Million Ponzi Scheme

A Maryland man has been convicted of operating a $28 million Ponzi scheme that promised victims personal wealth and financial freedom, authorities announce.

The Ponzi scheme targeted church-goers

The Ponzi scheme targeted church-goers

Photo Credit: Image by Jeff Jacobs from Pixabay

Arley Ray Johnson, 63, convinced victims to invest in the company "1st Million", by holding promotional events at upscale hotels and event spaces, attending church-sponsored events, intending to target investments from churchgoers, and representing themselves as religious men more interested in the financial freedom of others than personal financial gain, according to the Department of Justice.

Johnson and co-defendants Dennis Mbongeni Jali, and John Erasmus Frimpong, posed as "pastors" and told prospective investors that 1st Million’s work was in furtherance of God’s mission as it helped churches and their members achieve personal wealth and financial freedom. 

1st Million offered a 12-month guaranteed investment called “Corporate Guarantees,” that claimed victim's investments would be invested in foreign currency or cryptocurrency with a monthly return ranging from 6% to 35% of the initial investment.

At the end of the investment period, investors were promised that they would receive all of the principle invested, yet 1st Million did not invest victims’ funds as promised and, instead, misappropriated the funds for themselves and used the funds to keep the scheme afloat, including using funds from new investors to repay existing investors.

Johnson also told investors that 1st Million would hold the investments in a trust that would be safe from market volatility, and that 1st Million was thriving and earning profits. In reality, the accounts the investors' money was held in were frequently overdrawn, with numerous cash-flow problems, which were hidden from victims.

By Spring 2019, 1st Million’s accounts were being overdrawn by hundreds of thousands of dollars, and some of the checks 1st Million sent to pay investors monthly returns were returned by the bank due to insufficient funds. Johnson and Frimpong continued to solicit funds from investors, failing to disclose the financial problems, causing the scheme's collapse in 2019. The collapse lost the investors millions of dollars.

Over 1,200 victims were persuaded to invest over $28 million throughout the course of the scheme. 

Johnson faces a maximum sentence of 20 years in federal prison for a wire fraud conspiracy and for each count of wire fraud; a maximum of five years in federal prison for a securities fraud conspiracy and a maximum of 20 years in federal prison for each count of securities fraud. A sentencing is scheduled for Jan. 5, 2023.

John Erasmus Frimpong, 42, pleaded guilty to a wire fraud conspiracy, conspiracy to commit securities fraud, and to securities fraud. A sentencing has been scheduled for Feb. 10, 2023.

Jali fled the United States in May 2019, but has since been arrested in South Africa.

Separate civil actions filed against Johnson and his co-defendants by the Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission remain pending.

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