An “advance fee investment opportunity” offered by a Lynchburg man was a $400,000 scam that fueled his gambling habit, federal prosecutors said.
Jeffery Thomas Tuggle, 45, pleaded guilty Thursday after waiving his right to indictment to two counts of tax fraud, one count of wire fraud and one count of failing to file a tax return in U.S. District Court in Lynchburg, according to a U.S. Attorney’s Office news release.
Tuggle was accused of scamming investors out of more than $400,000 in a Ponzi scheme. He faces a maximum sentence of 27 years in prison and a fine of up to $775,000.
“Mr. Tuggle used trust and the promise of high returns to steal money from hard-working, innocent people,” United States Attorney Julia Dudley said in the release. “He did all this so he could gamble. He gambled away the savings of his victims. He gambled away their futures and the futures of their children.”
Evidence presented in court Thursday by Assistant U.S. Attorney Ronald Huber showed that between 2004 and 2006, Tuggle created a scheme that promised investors returns of 30 to 40 percent, the release said.
He told investors that he was working with a group of lawyers to provide their clients with money right away based on their legal claims, the release said. When the clients and their attor-neys received their settlements, the investors would be repaid plus interest.
Prosecutors said the only thing Tuggle did with the money was gamble over the Internet and on sporting events, the release said. Payments made to investors were with other investors’ money or gambling winnings.
A total of 19 investors lost more than $400,000, the release said.
The investigation also revealed that Tuggle did not file an income tax return for 2004, and returns he filed between 2005 and 2006 had false statements and failed to report an accurate yearly income, the release said.
The IRS, along with the FBI and the Campbell County Sheriff’s Office, conducted the investigation.
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