Hamilton, NY (AP) – For decades, Miles Burt Marshall has been the man you went to see in a New York State State if you have a little money to invest, but you want to keep it locally.
Working from an office in the charming village of Hamilton, on the road from Kolgate University, Marshall prepared taxes and sold insurance. He also took money for what was sometimes called an “8% fund”, which guaranteed that a lot of annual interest, no matter what happened to the financial markets.
His customers spread the word of family and friends. Do you have a retirement egg? Let Burt do. He will invest it in local property rental and your money will grow faster than in a bank.
Marshall was friendly and folk. He handed out gift bags with maple syrup, pickles and local honey in jars, marked with sweet sayings like: “Do not be juice. For the right insurance coverage, call Miles B. Marshall.”
“He would tell you about all the other people investing. Churches invest. Fire companies invest. Doctors invest,” said a client, Christine Corigan. “So you would think,” Well, they are smart people. They won’t do this if it wasn’t good to do it … Why would you be suspicious? “
Then everything collapsed.
Marshall owes nearly 1,000 people and organizations about $ 95 million in principal and interest when he filed for the protection of bankruptcy two years ago, according to the trustee’s documents.
This summer, the 73-year-old businessman was accused of accusing his investment business is a scheme of Ponzi. He could face prison if he was convicted.
Marshall’s lawyers declined to comment.
The common losses from Marshall’s investors do not correspond to the multi -grade Ponzi scheme, mastered by Bernie Madoff. But they appear large in the small, college town with about 6,400 people and its large countryside.
Many investors were teachers, workers, office workers or retirees at Colgate. Some have lost their lives of tens or hundreds of thousands of dollars. Corigan and her husband, who own a restaurant 30 miles (48 kilometers) to the east, are due to about $ 1.5 million.
Now they wonder how someone who looked so reliable who was holding annual parties for their clients and even called them on their birthdays can convey their trust.
“You look at life differently after it happens. It’s like:” Who do you trust? “Said Dennis Sullivan, to whom they are about $ 40,000. “It’s sad because of what he did in the area.”
A reliable local businessman
Marshall and his wife lived in Victorian brick, blocked from his office. In addition to the insurance and tax preparation, he hired over 100 properties and runs a business for self -storage and printing.
His parents managed a business for insurance and real estate in the area and Marshall’s name was respected locally.
Although he left the college, he was a federally enrolled tax professional. For many in the area, he looked knowing the money and kept a clean office.
“He had a French doors and a beautiful carpet and a large desk, and it just looked like he was prosperous and reliable,” Corigan said.
Marshall was starting to make money from people for buying and maintaining rental property in the 1980s. People returned order to order – paper slips with the amount of money. Withdrawals can be made with a 30 -day notice. People can choose to receive regular interest payments.
Participants saw transactions as investment. Marshall called them loans.
For many years, Marshall has been doing well with his promises to pay interest and withdrawal. More people participated in words. Sullivan remembers his parents giving him Marshall’s money, then they did it, then his fiancé, then the daughter of his fiancé, then his son and even his motorcycle club.
“Everyone goes into it,” Sullivan said.
A number of investors lived in other states, but had ties with the area.
The promise of an 8% return was inconspicuous in the 80, a time of higher interest rates. But it stood out later as the percentages dropped. Marshall said bankruptcy proceedings that he had accepted appreciation for his real estate would cover more than debts.
“This is obviously wrong now,” he said, “but I always thought that.”
Reading with more than $ 90 million debt
The money stopped running until 2023.
Marshall applied for bankruptcy protection on Chapter 11 in April, declaring over $ 90 million liabilities and $ 21.5 million assets, the bigger part of it in real estate.
He explained in the submission that he was hospitalized for a “serious heart disease”, which requires two surgeries that cost him $ 600,000. As the news of his illness spread, there was a punch of notes holders who wanted their money back.
The trustee of the bankruptcy Fred Stevens has accused Marshall’s insolvency of incompetent business practices and borrowing by people with exceeded tariffs. The trustee claims that by 2011, Marshall has been using new investment money to pay previous investors, the distinctive feature of the Ponzi scheme.
Prosecutors claim that Marshall is falsely representing the profitability of its real estate business and made their employees generate “transactions generalizations” with false information on the balance of bills and the interest earned.
The money was directed to his other businesses, and he spent hundreds of thousands of dollars on investors on personal expenses, including the airline trip, meals, groceries and yoga studios, according to prosecutors.
Marshall’s customers feel betrayed.
“We left him there so that he would accumulate. Well, he accumulated in his pocket,” Barbara Baltika said of her investment.
The pulsation effects of multimillion -dollar losses
Marshall pleaded innocent in June on charges of cheating with great theft and securities. He is accused of stealing more than $ 50 million.
Marshall’s home and property were sold as part of the bankruptcy proceedings that continue. The people who gave Marshal their money to recover about a 5.4 cents for the dollar from assets sales. Potential claims against financial institutions are pursued, according to the trustee.
Baltik said she and her husband are due to hundreds of thousands of dollars and now she wonders how she would pay the doctors’ bills. Sullivan’s mother moved with him after losing her investment.
At Epworth, Georgia, retirement Carolyn Call will never see the money he hoped would help increase his social security payments. She found out about Marshall, although Uncle who lived in New York.
“I’m just able to pay my bills and continue,” she said. “Nothing extravagant. No trips. I can’t do anything almost to the grandchildren.”
