Lubbock Investors Face Federal Charges in Multi-Million Dollar Ponzi Fraud

Joshua Allen and Michael Cox, residents of Lubbock, are confronting significant federal charges after being indicted on July 2 for allegedly masterminding a large Ponzi scheme via various investment entities called Ferrum Capital. 

Last week, two men made their appearance in federal court in San Antonio following a grand jury's indictment on several serious charges, which encompass conspiracy to commit wire fraud, securities fraud, and money laundering. If found guilty, each man could face a maximum sentence of 70 years in prison.

The U.S. Attorney’s Office reports that Allen and Cox managed four companies—Ferrum Capital LLC and its affiliates, Ferrum II, III, and IV—while allegedly deceiving numerous investors. Authorities assert that they lured millions of dollars by making deceptive statements and concealing excessive fees. Similar to multiple fraudulent schemes, the duo reportedly compensated initial investors with money from those who joined later, creating a façade of prosperity and enticing additional victims.

The FBI and IRS conducted a recent investigation that revealed the diversion of a significant amount of investor funds for personal gain. The recent indictment comes on the heels of the December 2024 arrest of Brooklynn Chandler Willy from San Antonio, a financial advisor alleged to have guided clients into investing in a fraudulent scheme via her companies, Chandler Capital Holdings and Queen B Advisory LLC.

Federal authorities report that the scheme was largely dependent on falsified returns and concealed fees, which ultimately led to its downfall. The U.S. Attorney's Office highlighted this, underscoring the gravity of the situation by pointing out the extensive financial damage inflicted on unsuspecting investors.

Allen and Cox are still facing federal examination as the case unfolds, with investigators persistently revealing the extensive nature of the financial fraud purportedly orchestrated via Ferrum Capital.

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