A Vallejo man faces a 20-year prison term and a $250,000 fine when he is sentenced Aug. 3 in connection with a $15 million Ponzi investment scheme, according to the U.S. Department of Justice.Robert Cephus Brown Jr., 56, pleaded guilty to wire fraud Tuesday in U.S. District Court in Sacramento, U.S. Attorney Benjamin B. Wagner said.Brown’s co-defendant, Duane Allen Eddings, 49, of Vallejo, pleaded not guilty on March 3 and his trial date will be set next Tuesday, the Department of Justice said. Both men were indicted on Feb. 26, 2009.Prosecutor Matthew Stegman said Brown and Eddings devised a scheme to defraud investors throughout the U.S. between 2001 and the present.Brown said he was a stock market expert who could make huge profits in good and bad times, according to prosecutors. The defendants claimed a “24-Month/High Yield Loan Agreement” would provide a 21 to 30 percent return every four to four and a half months
with three payouts each year for a total return of 63 to 90 percent, the Department of Justice said.Another investment scheme that offered a “24-Month Gifted Agreement” promised the money invested, called a gift, would return the original “gift” plus 100 percent accrued interest after two years, the Department of Justice said. Brown and Eddings also offered a “Double Diamond Plan” that promised to double the invested principal in three months, prosecutors said.The indictment alleged Brown spent investors’ money on personal expenses, including expensive clothes, hotels, restaurants and a Ferrari Testarossa, and withdrew more than $3.5 million in cash of investors’ funds.The U.S. Securities and Exchange Commission filed a civil lawsuit in July 2008 alleging securities fraud and got a court order prohibiting Brown from engaging in securities fraud, prosecutors said.
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