A former advisor who masterminded a Ponzi scheme that defrauded more than 400 investors across at least 20 states, resulting in losses exceeding $49 million, has been brought to justice.
The US Attorney’s Office of the Northern District of Georgia announced that John J. Woods, a 58-year-old from Marietta, Georgia, has been sentenced to nearly eight years in federal prison.
Woods was registered as an advisor for nearly 30 years and was most recently employed by Oppenheimer in 2015, according to his BrokerCheck profile.
The scheme, which spanned 13 years, targeted older people and military veterans.
In the statement announcing the decision, US Attorney Ryan K. Buchanan highlighted the gravity of Woods' actions: “Woods abused the trust of his victims, including retirees, seniors, and military veterans, who lost their life savings and retirement accounts due to his greed.”
Acting as a fiduciary and leading other investment advisor reps, Wood had promised investors profitable returns through investments in his “Horizon Private Equity” fund.
Despite his assurances that the fund entailed minimal risk and provided a diversified investment portfolio in government bonds, stocks, and small real estate projects, investors' funds weren't utilized as promised. Instead, they were used to pay returns to earlier investors, with Woods diverting some of the funds to personal projects, including purchasing an interest in a baseball team.
The fraudulent operation was eventually shut down by the Securities and Exchange Commission in 2021.
Keri Farley, special agent in charge of FBI Atlanta, expressed hope that the sentencing would serve as a deterrent. “Hopefully this sentence sends the message that the FBI will not tolerate individuals who offer victims false promises and take advantage for their own personal benefit.”
US District Judge Sarah E. Geraghty sentenced Woods to nearly eight years in prison, followed by three years of supervised release. He is also to pay restitution to the victims, with a hearing scheduled for April 15 to determine the exact amount.
Woods' Ponzi scheme has also haunted Oppenheimer & Co. In 2022, the firm lost a huge arbitration decision of $36.7 million to eight investors who invested in Woods' fund. And in 2023, Finra arbitrators ordered Oppenheimer to pay around $1.5 million in compensatory damages to two investors who were caught in the scheme.
Broker-dealers that sold the defunct securities backed by Inspired Healthcare generated more than $100 million in fees and commissions.
FINRA barred the advisor, Sung Moo Cho, last month.
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