Ponzi Scheme Trial Rescheduled for Michigan Man
Troy Barnes, a 53-year-old resident of Riverview, Michigan, has been accused of operating a Ponzi scheme that defrauded thousands of investors out of millions of dollars. Barnes and his co-conspirator, Kristine Louise Johnson of Aurora, Colorado, are now facing federal charges. And the possibility of many years behind bars.
According to court documents, Barnes was the owner, president and marketing director of “The Active Community.” It was marketed as a “lifelong investment plan” promising a 700% return on all investments. Barnes allegedly claimed that this particular investment plan came “with limitless returns”, and that it was “the answer to all our prayers.”
However, because early investors were paid with money gained from later investors, prosecutors are calling this a classic Ponzi scheme. According to federal prosecutors, Barnes and Johnson urged their investors to avoid referring to their plan as an “investment”, possibly to avoid the ramifications of federal scrutiny down the line.
When the Ponzi scheme finally collapsed in February of 2015, Barnes and Johnson were left owing investors a total of 51 million dollars in investment returns. The United States Secret Service conducted the investigation that led to the arrests of Barnes and Johnson.
Johnson pleads guilty to wire fraud
In June, Johnson pled guilty to wire fraud conspiracy, which is a felony under federal law. Barnes has been charged with wire fraud and wire fraud conspiracy, both felonies. Unlike Johnson, he has taken a different approach in his own defense.
Barnes was scheduled for a conference call at the Federal Court in Colorado on June 3rd. He didn’t arrive. Later that month he wrote a letter to the presiding Judge explaining that he hadn’t been able to be there because he had a sick child. He also explained that he had not retained an attorney.
On top of that, he added that he was guilty only of “being ignorant” but wanted to “do the right thing.” He told the judge that he was having difficulty understanding the charges against him as he had done nothing criminal but simply been ignorant of the law. The reason he provided for not hiring an attorney was that he couldn’t afford it.
In the end, Barnes retained an attorney and his trial has been rescheduled for January 2016.