18 Mar

Gary Martin, formerly of Asheville, set up Queen Shoals Consultants as a North Carolina limited-liability company in 2007. Through the company, Martin and several others accumulated investments totaling $28.5 million dollars. Those ‘investments’ were then funneled through a Ponzi scheme orchestrated by Sidney Hanson. Hanson was separately convicted of securities and wire fraud; he is serving a 22-year-prison sentence.

Martin pleaded guilty to money laundering related to the Queen Shoals Ponzi scheme last February and was just recently sentenced to 10 years in federal prison. There was no evidence presented that Martin was ever directly told that the Queen Schoals setup was a Ponzi scheme, but federal prosecutors pursued him based on false assertions he made to potential investors related to his own experience and qualifications.

Martin had assured various investors that Queen Shoals Consultants had more than 20 years of industry experience that included international precious metals and foreign currency markets. Martin also assured potential investors by explaining his own vast involvement in the company’s investments; evidence revealed that he had in fact invested only $4,000 in QSC.

The money laundering scheme that led to Martin’s federal white collar crimes charges and eventual conviction involved a referral fee paid to Martin by Hanson that was then used to pay the consultants working for Queen Shoals. In addition to 10 years in prison, Martin was sentenced to two years of supervised release and ordered to repay $31.7 million in restitution and disgorge $28.5 million in profits he received from the illegal Ponzi/money laundering scheme.

Source: FBI.com, “Former North Carolina Resident Sentenced to 10 Years in Prison in Money Laundering Conspiracy,” March 12, 2013