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Saturday, July 13, 2024

Charlotte man pleads guilty to investment fraud

A 26-year-old Charlotte resident pleaded guilty to wire fraud for defrauding over 100 victims of more than $700,000 through a fraudulent investment scheme.

Frank Mercado executed an investment fraud scheme in which he caused more than 100 investors to suffer almost $700,000 in losses from July 2019 to December 2022, according to plea documents and court proceedings.

Mercado’s victims included friends, former co-workers, and other social acquaintances.

Mercado induced the victims to invest their money by holding himself out to be an expert in options trading with years of experience and a successful track record.

As part of the scheme, Mercado falsely represented to victim investors that he would use their money for options trading and similar investments through his hedge fund, Tiger-Wolf Capital. Instead of investing the funds as promised, Mercado used a substantial portion of the investors’ money to fund his personal lifestyle, including to make large credit card payments and pay for personal expenditures such as Airbnb rentals, restaurants, and bars.

As Mercado admitted in court, he also used the investors’ money to make Ponzi payments to previous investors.

Court documents show that with the money that he did invest, Mercado suffered trading losses and then lied to investors about the performance of their investments.

For example, Mercado periodically sent updates to victim investors through emails, text messages, or screenshots of purported account portals that reflected fictitious trading gains. He also made false and fraudulent statements to investors about substantial returns on their investments in order to induce his victims to invest additional money with him or to leave their current investments with him.

Mercado was released on bond following his plea hearing. The wire fraud charge carries a maximum prison sentence of 20 years. A sentencing date has not been set.

 

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