Hamilton, NY (AP) – For decades, Miles “Burt” Marshall was the man you went to see in a northern New York section if you had money to invest but you want to keep it local.
Working from an office of the charming village of Hamilton, at the bottom of the road to Colgate University, Marshall has prepared taxes and sold insurance. He also took money for what was sometimes called the “8%fund”, which guaranteed a lot of annual interest, regardless of what happened with the financial markets.
His customers spend the word to family and friends. Do you have a retirement nest egg? Let Burt manage it. He will invest it in local properties and your money will increase faster than in a bank.
Marshall was friendly and folk. He gave gift bags with maple syrup, pickles and local honey in jars labeled with pretty sayings like: “Do not be a sap. For good insurance coverage, call Miles B. Marshall. ”
“He would tell you about all the other people who invest. The churches invest. Fire companies are investing. Doctors invest, “said a client, Christine Corrigan. “So you would think:” Well, they are intelligent people. They wouldn’t do that if it was not normal to do … Why are you going to be the suspect? “”
Then everything crashed.
Marshall owed nearly 1,000 people and organizations about $ 95 million in principle and interest when he filed a bankruptcy file two years ago, according to the trustee’s documents.
This summer, the 73 -year -old businessman was charged with accusations that his investment company was a Ponzi program. He could incur a prison sentence if he is found guilty.
The lawyers of Marshall refused to comment.
Total losses of Marshall investors are not below the Ponzi program of several billion dollars Bernie Madoff. But they are looming in the small university town of around 6,400 people and its surroundings largely rural.
Many investors were teachers, workers, office employees or Colgate retirees. Some have lost the lives of their tens or hundreds of thousands of dollars. Corrigan and her husband, who have a restaurant at 30 miles (48 kilometers) to the east, were due to around 1.5 million dollars.
Now they wonder how someone who seemed so reliable, who organized annual parties for his customers and even called them for their birthday could betray their confidence.
“You look at life differently after it happens. It is like” who are you trusting? “,” Said Dennis Sullivan, who was due to $ 40,000. “It’s sad because of what he has done in the region.”
A reliable local businessman
Marshall and his wife lived in a Victorian brick, to houses from his office. Aside from the insurance and the preparation of income, he rented more than 100 properties and directed a free-deposation company and a printing.
His parents had managed an insurance and immobilization company in the region and the name of Marshall was respected locally.
Although he left college, he was a tax professional registered in the federal government. For many in the region, he seemed to be informed of money and kept a careful office.
“He had French doors and a beautiful carpet and a large office and he just seemed to be prosperous and reliable,” said Corrigan.
Marshall began to take money from people to buy and maintain rental properties in the 1980s. People recovered order tickets – paper slips with the amount of the written dollar. Withdrawals could be made with 30 days notice. People could choose to receive payments of regular interests.
Participants considered transactions as investments. Marshall called them loans.
For many years, Marshall has made his promises to pay interest and processes. More people participated as the word spread. Sullivan remembers how his parents gave money to Marshall, then he did it, then his fiancée, then the daughter of his fiancée, then his son, and even his snowmobile club.
“Everyone turns upside down,” said Sullivan.
A number of investors lived in other states, but had links with the region.
The promise of 8% of yields was commonplace in the 1980s, a higher interest rate period. But it stood out later when the rates dropped. Marshall told a bankruptcy procedure that he assumed that the appreciation of his property would cover more than debts.
“This is obviously false now,” he said, according to the documents, “but that’s what I have always thought.”
Given more than $ 90 million in debt
The money has stopped flowing by 2023.
Marshall filed a request for protection against the bankruptcy of Chapter 11 in April, declaring more than $ 90 million in liabilities and $ 21.5 million in assets, most of them in real estate.
He explained in a file that he had been hospitalized for a “serious heart disease” which required two surgeries, which costs him $ 600,000. While the news of his illness spread, there was a race on ticket holders asking for their money.
The bankruptcy trustee, Fred Stevens, accused Marshall’s insolvency on incompetent business practices and loans from people at rates above the market. The trustee argued that in 2011, Marshall used new funds to reimburse previous investors, the brand brand of a Ponzi program.
Prosecutors claim that Marshall falsely represented the profitability of his real estate activity and caused his staff to generate “transactions summaries” with false information on account sales and the interests won.
The money was channeled in his other companies and he spent hundreds of thousands of dollars in investors on personal spending, including airline trips, meals, grocery stores and yoga studios, according to prosecutors.
Marshall customers feel betrayed.
“We left him there to accumulate. Well, he accumulated in his pocket,” said Barbara Baltusnik about his investment.
Training effects for loss of several million dollars
Marshall pleaded not guilty in June for accusations of large theft and fraud in securities. He is accused of stolen more than $ 50 million.
Marshall’s house and properties were sold as part of bankruptcy procedures, which continue. People who gave Marshall their money to recover around 5.4 cents from the dollar sales of assets. Potential complaints against financial institutions are being executed, according to the trustee.
Baltusnik said that she and her husband owed hundreds of thousands of dollars and she is now wondering how she will pay the invoices of doctors. Sullivan’s mother moved with him after losing his investment.
In Epworth, in Georgia, retirement Carolyn Call will never see any money that she hoped would help increase her social security payments. She discovered Marshall through an uncle who lived in the north of New York State.
“I’m just able to pay my bills and continue,” she said. “Nothing extravagant. No trips. I can’t do anything barely for grandchildren.”
