Texas man pleads guilty in $2.1 million ‘meme stock’ Ponzi scheme

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MONT BELVIEU, Texas - A 40-year-old man from Mont Belvieu, about 30 miles east of Houston, has pleaded guilty to wire fraud for his role in a Ponzi-style investment scheme.

Investment scheme from meme stocks

What we know:

Carl Channing Spence admitted he operated a business called AEI Financial out of his residence from January 2022 through August 2023, according to federal prosecutors.

Spence solicited friends, acquaintances and colleagues, promising high returns through stock trading that he claimed specialized in so-called "meme stocks." According to U.S. Attorney Nicholas J. Ganjei, Spence told investors they could expect returns of 10% to 12% by investing in popular stocks during a period of rapid market gains.

AEI Financial fraud

Instead of investing the funds as promised, Spence diverted much of the money for personal use and to make payments to earlier investors in order to maintain the appearance of legitimate returns, authorities said.

After receiving money from victims, Spence created fraudulent account statements that falsely showed investment growth and profits. Prosecutors said he used those statements to persuade victims to reinvest additional funds. In reality, Spence put investor money into a single account and lost much of it through unsuccessful trades, according to the U.S. attorney’s office.

FBI uncovers financial losses

Dig deeper:

The scheme resulted in numerous victims who received fraudulent account statements but never recovered their original investments or the promised returns. Investigators said Spence obtained approximately $2.1 million from known victims.

The FBI conducted the investigation. 

Assistant U.S. Attorneys Thomas Carter and Brad Gray are prosecuting the case.

Sentencing for Carl Spence

What's next:

U.S. District Judge Lee H. Rosenthal is scheduled to sentence Spence on April 14. He faces a maximum penalty of up to 20 years in federal prison and a possible fine of up to $250,000.