AG's office fines Westminster couple for operating $33 million Ponzi scheme

The term Ponzi scheme might conjure images of slick, big city hustlers and gritty cop and courtroom dramas. But Aaron Puckett, a certified financial planner and founder of Puckett and Sturgill Financial Group, in Westminster, wants people to know that Carroll County is no stranger to white collar crime.

“This stuff happens right here. It’s not just on Wall Street, it’s not just Bernie Madoff,” he said. “It happens right here in our little town, too.”


Puckett was referring to a recent action by the Maryland Office of the Attorney General, which on Jan. 4 announced a civil complaint against Ronald D. Morley, his wife Diane Morley and the couple’s Westminster-based businesses, The New Wealth LLC, Main Street Estate Group, Inc., and Jenny DB Properties LLC.

The complaint, stemming from a securities division of the office of the attorney general, charges the Morleys with 11 counts of violating the Maryland Securities Act by engaging in a Ponzi scheme, soliciting $33 million in investments from 130 investors from nine states to purchase stocks for which the Morleys were paid $3.1 million in commissions. The Morleys were not registered to sell securities and had in fact been barred from doing so, or offering investment advice, by the office of the attorney general back in 2006.

The 30-year-old wife of a Towson man accused of running a $364 million Ponzi scheme has been charged with conspiracy, obstruction and removing property to prevent its seizure.

According to a media release from the Office of the Attorney General, the Morleys consented to an administrative consent order, a civil final judgment and consent order for permanent injunction assessing almost $4 million in penalties from the Morleys.

Attempts to reach the Morleys were unsuccessful.

The Times reached out to multiple victims of the Morleys’ alleged Ponzi scheme, both directly and through Puckett, but none who responded were willing to comment on the record for this story. (A Ponzi scheme involves fraud in which early investors are paid, without their knowledge, through funds from later investors while being led to believe they are profiting from the performance of their investments).

According to the consent order, the couple is required to pay the penalties in $500 monthly installments from Jan. 1 to March 31, $600 a month from April through June 30 and $800 a month beginning July 1 until the penalty is paid off. At that rate, it will take 5,001 months to fully pay off the penalty, or about 416 years.


But that repayment schedule is meant to be lenient so much as practical, according to Melanie Lubin, securities commissioner with the Office of the Attorney General.

“It was realistic. He filed bankruptcy before this proceeding,” she said. “The fine money is being used for restitution. It’s set up like this so we can collect the money, to the extent that he can make payments. And then the money can be distributed to the investors.”

The question Puckett raised, however, is how Ronald Morley was able to continue running a Ponzi scheme after the Office of the Attorney General’s first action against him in 2006.

It was just prior to that action by the office of the attorney general that Puckett first heard of Morley. It was 2005 and a client of Puckett’s had come to him with questions, as the client’s elderly parents were doing business with Morley.

“I started asking a few more questions and sure enough, I’m like, this guy is up to no good,” Puckett said.

And yet the cease-and-desist order in 2006 wasn’t the end for the Morleys. Despite being barred from selling securities or offering investment advice, they did so anyway. The parents of one of Puckett’s clients, a couple in their 80s, allegedly lost around $150,000 that they had invested with Morley, he said.

A team of attorneys and investigators has billed $500,000 for 44 days of work to begin to sell of the valuables of Kevin Merrill, a Towson man who prosecutors say funded a lavish lifestyle through a Ponzi scheme.

Morley was issued a cease-and-desist order by the U.S. Securities and Exchange Commission in 2016 prior to the action by the Office of the Attorney General in January.

“He continued to operate right here on Main Street in broad daylight,” Puckett said. “Everybody here in town knew what he did, he had already been found to be practicing without a license, so myself and a lot of the other attorneys in town were constantly like, ‘How is he getting away with this? He’s continuing to solicit.’”

But this raised a question for Lubin, of the AG’s office, as well.

“Why weren’t people telling us?” she said. “[Morley] had already been barred and if people had called us we would have told them he’s not supposed to be doing this, and then we would have known that he was doing this because people called us.”

Puckett, at least, said he wasn’t sure making a call would make a difference.

“The OAG caught the bad guy, gave him a small fine and let him keep running his business,” he wrote in an email. “There was nothing that made me or anyone else hope that contacting them again would yield any better results. If the OAG wanted to prevent someone like this, why wouldn't they have any followup at all?”

Leads from professionals, be they CPAs or attorneys, are often key to office of the attorney general investigations, according to Lubin.

“I always tell professionals, you will hear about these things before we do, because the con artists are really good at getting people to not call anybody in charge,” she said. “At some point, investors typically realize something is going on, but the con artists can keep them going and say, ‘yeah, you really can’t go to the SEC or the government or whoever because we may not be able to get your money back, because it will blow the whole thing up.’”

While he could not comment on this particular case, Carroll County State’s Attorney Brian DeLeonardo said cases involving securities and victims in multiple jurisdictions are typically the purview of the Office of the Attorney General.

“We might have two people or three people in our jurisdiction, but there may be 30 people statewide, so that’s what the AG’s office would be responsible for,” he said.

DeLeonardo’s office is also empowered to bring criminal charges, he said, but cannot file the type of civil sanctions the Office of the Attorney General filed in this case.

“They have the ability to do criminal charges,” he said, speaking generally of the AG’s office. “It’s not unusual that you might see some civil stuff and then it follows with criminal later. A great example is Enron. They had some civil stuff that was done but then ultimately you wound up getting criminal stuff out of it, too.”


Lubin said that while she does not handle criminal referrals, the office has that power, but that she could not confirm or deny any consideration of criminal charges related to Morley.


Lubin and Puckett were in agreement, however, in their belief in the importance of investors taking the time to research people with whom they will do business.

“In my experience, people spend more time researching how to save money on a toaster oven or a set of tires or a washing machine and a dryer than they do about their life’s savings,” Lubin said. “It’s a teaching moment and that’s a horrible thing to say because I never want to blame a victim — it’s not their fault that they were taken. But what we really try to tell people is you’ve got to do a little bit of research. Call us. Google the person.”

Investors can call the Office of the Attorney General Securities Division at 410-576-6360 if they have questions about a financial business or individual.

Or, Puckett said, give him or another professional a ring.

“If somebody called me today and asked me today about my competitors,” Puckett said, “I would say, ‘yeah, they are competitors of mine, they are good people. You can trust them. They are not there to take advantage of you. Yeah, they will have differences of opinion, but you know what, you’re fine doing business with them.’ And they’d say the same thing about me.”

And going forward, Lubin said, her office would like to hear from anyone who has concerns about Ronald and Diane Morley.

“We want to know if anybody has any information about recent activity where he is involved in investments, because he is barred from being in the business, as is his wife,” she said. “If people have something going on they don’t think was covered by our order, really recent activity, they should let us know.”

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