Charlotte man accused of cheating victims out of millions pleads guilty

Updated: Jan. 12, 2018 at 4:10 PM EST
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CHARLOTTE, NC (WBTV) - A Charlotte investment adviser accused of bilking dozens of victims out of millions of dollars, including local professional athletes and members of his church, pleaded guilty Friday.

Richard Wyatt Davis Jr., 40, pleaded guilty to securities fraud and tax evasion.

PREVIOUS: 100 victims bilked out of $19M in Charlotte investment scheme

Davis defrauded 75 victims of $9.3 million between 2010 and Feb. 2015, court documents say.

Davis is accused of spending the money on vacation homes, vehicles, nannies, a personal chef and a groundskeeper. He also used the money to pay his and his then-wife's personal credit cards and his mortgage, according to the indictment.

Davis would induce victims to invest in investment funds he controlled, including DCG Real Assets, H20, LLC and Basalt Exploration, records show.

Davis assured his victims that his fraudulent investment vehicles were low-risk and involved real estate, precious metals and natural resources, according to the indictment. He touted the investments as a safe alternative to the stock market and falsely assured his victims that their investments were growing in value.

In reality, Davis invested none of the victims' money, the indictment said. He instead transferred most of the victims' money to other entities he controlled, and used some of the money to make Ponzi-style payments to earlier investors to conceal and prolong the scheme., according to the indictment. Other money went to support his personal lifestyle, prosecutors said.

Court records show that some of Davis' victims had rolled over their entire retirement savings into his funds.

To avoid fulfilling victim withdrawals requests, Davis gave numerous excuses, including that the victims' money was unavailable because the funds were tied up in investments with specific maturity periods, according to the indictment.

Prosecutors said he also falsely advised victims they needed to invest additional funds to secure the return to their original investment. Davis was also frequently evasive or failed to report to investors' inquiries about the status of their investments, and even threatened to discontinue managing the investments if investors asked for too much information, according to prosecutors.

The indictment also said Davis filed false tax returns for 2009 and 2011 that reflected negative total income. He also failed to file individual income tax returns for 2010 and 2012, according to the indictment. During the same time, Davis submitted various financial statements to banks and courts claiming his annual income was anywhere between $385,000 and upwards of $1.5 million, prosecutors said.

Davis is currently released on bond. The securities fraud charge carries a maximum prison term of 20 years and a $5,000 fine. The tax evasion charge carries a maximum prison term of five years and a $250,000 fine.

A sentencing date has yet to be set.

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