The founders of a fake “hedge fund” that operated out of Kings Mountain pleaded guilty in federal court in Charlotte Wednesday (April 27th) to charges that they orchestrated a $4 million Ponzi scheme. Austin Delano Page, 26, of Grover, pleaded guilty to wire fraud, and Brandon Alexander Teague, 26, of Belmont, pleaded guilty to securities fraud. The two were released on bond pending sentencing.
According to filed documents from the plea hearings, from October 2020 to December 2021, Page and Teague engaged in an investment scheme that defrauded hundreds of investors, some of whom were at or near retirement age, of more than $4.2 million. Court documents show that the defendants falsely represented to victims that Page and Teague were running a hedge fund out of Kings Mountain, D&T Investment Group, that invested in various securities, including stocks of well-known companies like Apple. Contrary to representations made to victims, D&T was not a hedge fund and it did not hold any securities licenses or registrations.
Page and Teague were not licensed to sell securities and did not have a background associated with the sale of securities. In fact, prior to orchestrating the investment scheme the defendants sold campers.
Page and Teague required investors to sign, among other documents, an investment contract with D&T. These documents contained false information, including that D&T would guarantee 100% of the investors’ initial investment, and that investors would receive 70% of the trading profits. In reality, the investors’ money was not guaranteed, and the purported “profits” investors received were Ponzi-style payments--the defendants used new investors’ money to make payments to existing investors. To cover up the fraud, Page and Teague sent victim investors monthly statements that reflected fictitious trading gains. When certain investors and D&T employees began to question the legitimacy of D&T’s operations, Page created fictitious screenshots of various financial accounts that reflected inflated D&T account balances, including a fake screenshot of a D&T brokerage account that reflected a balance of over $16 million when in reality the account had a balance of less than $7.
In addition to making Ponzi payments to investors, a significant portion of the funds was used to pay excessive salaries and other compensation to D&T employees, including to members of Page’s family. Page paid several D&T 'employees' annual salaries of over $100,000 and also paid some several thousand dollars each for getting the D&T company logo tattooed on their bodies. The defendants also squandered victims’ money on personal expenses including clothing, jewelry, travel, luxury car rentals, and made cash withdrawals.
On December 2nd, 2021, as the fraudulent scheme was collapsing, the defendants traveled to Italy. On the same day, Page informed D&T employees, some of whom did not know that D&T was a fraud, that they would be closing the company. The pair was arrested on New Year’s Eve at JFK Airport in New York as they returned to the United States.
The duo were released on bond with home detention and location monitoring following the plea hearings. Page faces a a maximum prison term of 20 years and a $250,000 fine. Teague could get five years and a $250,000 fine. A sentencing date has not been set.
Kings Mtn. Police began investigating the business in early December when they received complaints from victims. When the pair left the country, they turned the investigation over to the FBI.
