Wife of Ponzi Scheme Perpetrator Pleads Guilty to Federal Charge for Conspiring to Remove and Conceal Assets in Violation of Court Orders
Amanda Mahlstedt Merrill, age 30, of Towson, Maryland, pleaded guilty today to the federal charge of conspiracy to remove property to prevent seizure, obstruct justice, and disobey court orders.
The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Robert W. Manchak of the Federal Housing Finance Agency, Office of Inspector General.
“This prosecution demonstrates our commitment to the integrity of the judicial process. When the district court enters an order in a case, we expect the affected persons to abide by the order, not conspire to remove and hide assets,” said U.S. Attorney Robert K. Hur. “We will prosecute those, like Amanda Merrill, who hide assets which are subject to seizure, who obstruct justice, and who attempt to keep ill-gotten gains for their own benefit rather than restoring them to the victims of fraud.”
According to her plea agreement, on September 11, 2018, Amanda Merrill’s husband, Kevin Merrill, was indicted on federal charges of conspiracy to commit wire fraud, identity theft, money laundering conspiracy, and money laundering, in connection with a $394 million Ponzi scheme. The indictment included a forfeiture allegation for $39 million, six real estate properties, 25 cars, a boat, an interest in an aircraft, an insurance policy, and jewelry. The properties to be forfeited included the Merrills’ residence in Towson and a home on Spyglass Lane in Naples, Florida. On September 13, 2018, the Securities and Exchange Commission (SEC) brought a civil enforcement action against Kevin Merrill, other persons and entities, and Kevin Merrill’s companies. The Court issued a temporary restraining order freezing assets and granting other emergency relief and appointed a temporary receiver. Anyone receiving notice of the receivership order who possessed property, business books, records, accounts, or assets of the receivership parties was directed to provide those items to the receiver.
On September 18, 2018, Kevin Merrill was arrested at his residence in Towson and agents seized jewelry, his watch collection, cars, and over $520,000 in cash, mostly from a safe. Kevin Merrill was subsequently ordered to be detained pending trial as a risk of flight and a risk of obstruction of justice. FBI Special Agents provided Amanda Merrill with a receipt of items taken and asked her to disclose any information to assist agents in locating items not collected at the residence. Amanda Merrill was counseled by the FBI agents to be completely truthful in her answers and was warned against attempting to hide or move assets. Amanda Merrill’s counsel was also provided with a copy of the restraining order and the receivership order.
Nevertheless, beginning on October 3, 2018, Amanda Merrill redeemed the points on an American Express business credit card belonging to Kevin Merrill, even though she was not an authorized user. Amanda Merrill received 127 gift cards worth $26,075 for retail businesses such as Target, Home Depot, Nordstrom, Sephora, and Starbucks.
On October 13, 2018, Amanda Merrill and another individual traveled by plane to Naples, Florida, to the Spyglass Lane property, which the Merrills had purchased earlier that year for $10 million. The Merrills were captured on several recorded jail calls that day discussing Amanda Merrill’s trip to the Florida property, which they referred to in coded language as “the restaurant.” On the recorded jail calls, Kevin and Amanda Merrill discussed how to open the safe at the property. Amanda Merrill removed cash and other items from the home, which she placed into her purse, two large suitcases, and a carry-on bag. She told the other individual who accompanied her on the trip that she intended to tell her attorney that she had found the safe unlocked and empty. Video footage from BWI Airport security for October 13, 2018 shows Amanda Merrill returning from Florida rolling a carry-on bag and holding a large purse. Video footage revealed that Amanda Merrill also retrieved two large suitcases from the baggage carousel. American Express statements for Kevin Merrill’s business card (for which Amanda Merrill was not an authorized user) also show the purchase of plane tickets for Amanda Merrill and her companion, and payment for a rental car. Amanda Merrill’s American Express statement shows two airline charges of $75 each for two pieces of luggage, each of which was over the 50-pound limit, for the trip from Ft. Myers, Florida to BWI.
On October 30, 2018, counsel for Amanda Merrill e-mailed a letter directed to “Government, SEC, and Receiver,” which stated, among other things, that Amanda Merrill and her companion had gone to the house in Naples, Florida and “the unlocked safe at the house was empty,” and that they had removed six boxes of children’s clothing and personal items. The statement was false because Amanda Merrill misrepresented what had happened in Florida to her counsel and omitted the cash, the over-weight-limit suitcases, and the carry-on luggage in talking with her attorney.
In early November 2018, FBI Special Agents executed search warrants at the Merrill homes in Towson and Naples. In the Towson home, agents discovered approximately $15,378 in cash, $8,878 in a purse in Amanda Merrill’s bedroom, with the remainder in a closet drawer. Agents also located the two large suitcases, which were still tagged from the trip, but were empty, as well as the six boxes of children’s clothing and personal items in the Towson home. In the Florida home, agents used the transcription of the recorded jail call to gain access to the safe, which was empty.
According to the plea agreement, at sentencing the government will recommend that Amanda Merrill serve 12 months on electronic home monitoring with work release and restitution. U.S. District Judge Richard D. Bennett has scheduled sentencing for January 22, 2020 at 3:00 p.m.
Kevin Merrill, age 54, of Towson, previously pleaded guilty to conspiracy and wire fraud arising from his role in a $394 million investment fraud scheme that operated from 2013 through September 2018. Merrill faces a maximum of 40 years in prison for the wire fraud conspiracy and for wire fraud, as well as a possible fine of $500,000, or twice the gross gain, at his sentencing hearing scheduled to begin on October 10, 2019.
United States Attorney Robert K. Hur commended the FBI in Baltimore and Tampa; the Federal Housing Finance Agency, Office of the Inspector General; and the SEC for their work in this investigation. Mr. Hur thanked Assistant U.S. Attorneys Joyce K. McDonald and Martin J. Clarke, who are prosecuting the criminal case.