Lawyer used IOLTA accounts to give Ponzi scam credibility, government alleges
A Florida lawyer was recently indicted for depositing funds from an alleged Ponzi scheme into his IOLTA accounts.
According to the U.S. District Court for the Northern District of Georgia’s indictment filed last month, Roosevelt Tobias Bailey, 70, of Duluth, Georgia, created the Borg Investment Bank & Capital Trust and solicited investors for standby letter of credit and microcap programs from 2018 to 2022. He allegedly told investors that their money could fund the standby letters of credit for business owners.
“Bailey represented to potential investors that if they invested in the SBLC program, they were guaranteed substantial returns—up to 16 times their investment—within 30 to 90 days,” according to the indictment.
In reality, Bailey kept the investor funds for himself, according to the indictment. It also stated that he had an investment scam involving “precious stones and metals” and directed investors to send their investment funds for both programs to 48-year-old lawyer Alvin Jones’ IOLTA accounts.
“Investors trusted that Bailey and Jones would transfer the funds deposited into the IOLTA accounts for investments in the monetization of SBLCs. And the use of IOLTA accounts held by an attorney to receive the funds increased the perceived legitimacy of Bailey and the SBLC program in the eyes of investors,” according to the indictment.
According to the indictment, Bailey received $1 million from investors for the standby letter of credit program, most of the money was sent to Jones’ IOLTA accounts, and Jones regularly transferred money to Bailey’s personal account—at Bailey’s direction.
In an email, Jones told the ABA Journal he is a trust administrator.
“Dr. Bailey had been a client for years. I terminated that relationship when a claim against him was turned at me. I didn’t know whether he had done anything unlawful, but I separated in what I believed to be an abundance of caution. I have had no contact with him since,” Jones wrote.
The two are charged with wire fraud and money laundering.
Bailey was arrested Oct. 16; Jones was arrested Oct. 20, CBS News reports. Jones did not immediately respond to an ABA Journal interview request.
Updated Monday, Oct. 26, at 8:11 a.m., to add response from Jones.
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