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Government Actions
1:22-cv-02320-SDG
ATLANTA - John J. Woods has been sentenced to nearly eight years in federal prison for operating a 13-year Ponzi scheme that victimized more than 400 investors and caused a loss of over $49 million.
“Woods, while serving as a fiduciary, promised investors profitable returns but used the monies he raised from new investors to pay Ponzi profits to earlier investors,” said U.S. Attorney Ryan K. Buchanan. “Woods abused the trust of his victims, including retirees, seniors, and military veterans, who lost their life savings and retirement accounts due to his greed.”
“Illegal activity involving the investment industry, especially Ponzi schemes, has unfortunately brought financial ruin to many Americans,” said Keri Farley, Special Agent in Charge of FBI Atlanta. Hopefully this sentence sends the message that the FBI will not tolerate individuals who offer victims false promises and take advantage for their own personal benefit.”
According to U.S. Attorney Buchanan, the charges and other information presented in court: Woods operated a Ponzi scheme until being shut down by the U.S. Securities and Exchange Commission (SEC) in 2021. Woods solicited investors to invest in a fund called, “Horizon Private Equity.” Woods, and other investment adviser representatives acting under his direction, promised potential Horizon investors rates of return of six to seven percent on their investments. They represented that Horizon would earn a return by investing in, for example, government bonds, stocks, or small real estate projects. Woods, and others acting at his direction, also assured investors that Horizon investments carried minimal risk and were safe because Horizon maintained a diverse portfolio.
Contrary to these representations, the money received from new investors was not invested in a diverse portfolio; rather, funds collected from new investors was used largely to pay returns to previous investors. In fact, Horizon was able to pay guaranteed returns to investors only by raising and using new investor money. As a part of the scheme, Woods caused Horizon to issue monthly statements to investors that fraudulently misled investors by failing to disclose that the Horizon investments had not generated a positive percentage of return sufficient to cover the interest. Although Woods did not use the money to live a lavish lifestyle, he diverted investor funds to pet projects not approved by the investors, such as purchasing an interest in a baseball team in his name.
As of the end of July 2021, Horizon investors were owed more than $110,000,000 in principal investment amounts. Over 400 investors, residing in at least 20 different states, held investments in Horizon. Victims lost more than $49 million because of Woods’s scheme to defraud.
Woods, 58, of Marietta, Georgia, was sentenced by U.S. District Judge Sarah E. Geraghty, to seven years, eleven months in prison to be followed by three years of supervised release. Woods was also ordered to pay restitution to the victims of his scheme. A hearing to set the restitution amount owed to victims has been scheduled for April 15, 2024, at 2:30 p.m., before Judge Geraghty.
This case was investigated by the Federal Bureau of Investigation. The SEC provided valuable assistance. The SEC’s separate civil case is SEC v. Woods et al., No. 1:21-CV-03413-SDG (N.D. Ga.).
Assistant U.S. Attorneys Angela Adams and Stephen H. McClain prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
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