Wilmington investment advisor pleads guilty in $7 million Ponzi scheme

WILMINGTON, NC (WWAY) — A Wilmington man has pleaded guilty for his role in a $7 million dollar investment fraud scheme.

Shawn E. Good pleaded guilty to wire fraud and money laundering and faces up to 360 months in prison, according to the US Department of Justice.

“We are cracking down on fraudsters who scam unwitting investors,” said U.S. Attorney Michael Easley. “This investment advisor breached the trust of at least a dozen clients, taking over $7 million – money he promised would go to low-risk investments – and used it to line his pockets, buying real estate, luxury cars, and vacations. This decade-long scam has finally come to an end.”

According to court documents and information presented in court, Good was employed as an investment advisor for Morgan Stanley Smith Barney, LLC in Wilmington.

From 2012 to February 2022, Good obtained money through investment fraud, commonly known as a Ponzi scheme. Specifically, Good took investments from business clients and others for purported real estate projects and tax-free municipal bonds, touting these opportunities as low-risk investments that would pay returns of between 6% and 10% over three- or six-month terms.

Good caused some clients to obtain a liquid asset line of credit secured by their Morgan Stanley investment or retirement accounts. Good directed clients to transfer those funds to their personal bank accounts and then wire the funds directly to Good’s personal bank account.

Other victims paid Good by paper check and wire transfers using funds derived from sources other than Morgan Stanley accounts.

At least 12 victims invested approximately $7,246,300 based on false statements and misrepresentations made by Good. Instead of investing in land development or bonds, Good used the money for personal expenditures including his Wilmington home, a condominium in Florida, luxury vehicles including a Mercedes Benz, a Porsche Boxster, a Tesla Model 3, an Alpha Romeo Stelvio, and a Lexus RX350.

He also spent the money on fine dining and vacations to Las Vegas, Wyoming, France, Italy, and other destinations.

To lend credibility to the Ponzi scheme and to avoid detection, Good also used a portion of investor funds to make payments to earlier investors.