$1.25 Million Jury Verdict For Seniors Who Were Scammed In Ponzi Scheme

After a week long trial, a Wilson County jury returned a verdict for $1.25 million to two elderly investors who were defrauded by a Johnston County man names James L. "Rip" Rainey as a part of a widespread investment scam. Our clients were among hundreds of investors who had purchased unregistered securities marketed at the time as "business opportunities" in the sale and leaseback of mobile billboards.

As the investments were marketed, investors would purchase mobile billboards in units of $20,000 from Mobile Billboards of America, Inc. (MBA), who would then pay a monthly lease from advertising revenues. At the end of a seven-year-period, MBA would repurchase each billboard unit for the original price paid, so that the investment appeared as a method of preserving principal and making seven years of competitive interest. In reality, the sale and leaseback program was a Ponzi scheme, where the lease payments came from investors' own money.

The program was represented to investors as a "business opportunity" so that MBA and its sales agents could circumvent state and federal securities law. After regulators pursued MBA, they discovered that millions of dollars of retirees' savings had already disappeared. Because the defendant has hidden assets, the victims of this scam have not yet been able to collect on the jury's verdict.

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