Detroit Investment Fund Owner Sentenced to 100 Months in Prison for $39 Million Wire Fraud Scheme

Strategic Insights -

Andrew H. Middlebrooks, the former majority owner and CEO of EIA All Weather Alpha Fund 1 Partners (EIA), has been sentenced to 100 months in federal prison after pleading guilty to charges of wire fraud. Middlebrooks orchestrated a scheme to obtain over $39 million from investors by making false and fraudulent representations about the fund's performance. The scheme involved soliciting clients with promises of large returns, but the fund actually suffered catastrophic losses. Middlebrooks created and distributed false documents to conceal the truth from investors, resulting in losses exceeding $34 million to 97 investors.

Key Takeaways:

  • Andrew H. Middlebrooks, 33, was sentenced to 100 months in federal prison for wire fraud.
  • Middlebrooks orchestrated a scheme to obtain over $39 million from investors by making false and fraudulent representations about the fund's performance.
  • The scheme involved soliciting clients with promises of large returns, but the fund actually suffered catastrophic losses.
  • Middlebrooks created and distributed false documents to conceal the truth from investors, resulting in losses exceeding $34 million to 97 investors.
  • The investigation was conducted by the Federal Bureau of Investigation, and the Securities and Exchange Commission provided assistance.
  • United States Attorney Jerome F. Gorgon Jr. and Reuben Coleman, Acting Special Agent in Charge of the FBI, praised the dedicated members of the FBI and the U.S. Attorney's Office for their tireless work in bringing the case to justice.

Statistics:

  • 100 months (approximately 8.3 years) prison sentence for Andrew H. Middlebrooks.
  • $39 million: amount obtained from investors through false and fraudulent representations.
  • 97 investors: suffered losses exceeding $34 million due to Middlebrooks' scheme.
  • 476.81%: false cumulative returnMiddlebrooks claimed for EIA's track record (according to a 2019 document).
  • 81.82%: false monthly trading profit rate claimed by Middlebrooks (according to a 2019 document).

Sources:

  • United States Attorney's Office for the Eastern District of Michigan
  • Federal Bureau of Investigation (FBI)
  • Securities and Exchange Commission (SEC)