Date: Feb. 1, 2024 Contact: newsroom@ci.irs.gov On Jan. 31, the former chairman of 1 Global Capital LLC (“1 Global”) was sentenced to five years in prison for carrying out a $250 million securities fraud conspiracy scheme. The sentence comes after Carl R. Ruderman, of Aventura, Florida, entered his guilty plea in October 2023. Chief U.S. District Judge Cecilia M. Altonaga also ordered Ruderman to pay a forfeiture money judgment in the amount of $285,599,532, as agreed in his plea agreement. Ruderman’s restitution order is still pending. Ruderman was the chairman of 1 Global, a commercial lending business based in Hallandale Beach, Florida, that made the equivalent of “pay day” loans to small businesses at high interest rates, termed merchant cash advance loans (“MCAs”). Ruderman admitted that he and others made false and misleading representations to investors and potential investors as to the profitability of 1 Global’s business in marketing materials and periodic account statements. According to plea documents, investors were falsely told that 1 Global had audited financials by a public accounting firm, that the investor’s money would be spent on the MCAs, and that they could expect double-digit returns on their investments, among other things. Ruderman admitted that he spent 1 Global’s investor’s money on credit card payments, vacation travel, insurance payments for his art collection and valuable jewelry, drivers, nannies, housekeepers, mortgage payments for his house, tuition, and payments for a luxury car. Ruderman also admitted that he diverted 1 Global investor money to businesses benefitting him and his family, without the investors’ knowledge. Questions arose during the operation of the business as to whether 1 Global was offering or selling a security and whether the investment offering was required to be registered with the U.S. Securities and Exchange Commission. Ruderman admitted in plea documents that he knew that if 1 Global’s investment offering were determined to be a security, it would undermine the ability of 1 Global to raise funds from retail investors and to continue to operate without substantial additional expenses and reporting requirements. Ruderman also admitted that he directed a lawyer, Jan Atlas, to author two opinion letters in 2016 containing false information that allowed 1 Global to skirt federal securities laws. Four of Ruderman’s co-conspirators, all from South Florida, previously pleaded guilty and were sentenced for their roles in the fraud scheme, including two lawyers who provided Ruderman with false legal cover to skirt federal securities laws. The co-conspirators cases are referenced below: Alan G. Heide, the former chief financial officer of 1 Global pleaded guilty to conspiracy to commit securities fraud (case no. 19-cr-60231) and was sentenced to 60 months in prison by U.S. District Judge Roy K. Altman. Judge Altman also ordered Heide to pay over $57 million in restitution to the victims of the scheme. Attorney Andrew Dale Ledbetter pleaded guilty to conspiracy to commit wire fraud and securities fraud (case no. 20-cr-60103) and was sentenced by Judge Altman to 60 months in prison. Judge Altman also ordered Ledbetter to pay over $148 million to the victims of the scheme. Steven Allen Schwartz, the former chief operating officer of 1 Global pleaded guilty to conspiracy to commit wire fraud and securities fraud (case no. 20-cr-60003) and was sentenced to 24 months in prison by Judge Altman. Judge Altman also ordered Schwartz to pay over $36 million in restitution to the victims of the scheme. Attorney Jan Douglas Atlas pleaded guilty to conspiracy to commit wire fraud and securities fraud (case no. 19-cr-60258) and was sentenced to eight months in prison by Judge Altman. Judge Altman also ordered Atlas to pay over $29 million in restitution to the victims of the scheme. 1 Global filed for bankruptcy on July 27, 2018. As of that time, according to documents from related cases, 1 Global had more than 3,400 investors and had raised more than $250 million during the scheme. The bankruptcy case, In re: 1 Global Capital LLC, et al., No. 18-19121-RBR (S.D. Fla.), remains pending. The SEC previously filed civil fraud actions related to the 1 Global fraud, captioned, SEC v. 1 Global Capital LLC and Carl C. Ruderman, Case No. 18-61991-CV-BB (S.D. Fla.); SEC v. Alan G. Heide, Case No. 19-62047-CV-FAM (S.D. Fla.); SEC v. Jan Douglas Atlas, 19-62303-CV-WPD (S.D. Fla.); SEC v. Steven A. Schwartz, Case No. 20-80008-CV-DMM (S.D. Fla.); and SEC v. Andrew Dale Ledbetter, Esq., Case No. 20-61972-CV (S.D. Fla.). U.S. Attorney Markenzy Lapointe for the Southern District of Florida, Special Agent in Charge Matthew D. Line of IRS Criminal Investigation (IRS-CI), Miami Field Office, Special Agent in Charge Jeffrey B. Veltri of FBI, Miami Field Office, and Special Agent in Charge Quenton Sallows of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG), Miami Region, made the announcement. IRS-CI, Miami Field Office, FBI Miami, and FDIC-OIG, Miami Region investigated the case. Assistant U.S. Attorneys Elizabeth Young and Amanda Perwin prosecuted it. Assistant U.S. Attorney Nicole Grosnoff is handling asset forfeiture.
