Troutville man ran a Ponzi scheme aimed at the devout; 140 people lost millions
ROANOKE — A self-proclaimed “financial pastor” pleaded guilty yesterday in a federal court to swindling churchgoers around the country out of millions of dollars.
Some of those who believed William Warren’s phony claims that he could help them grow both richer and closer to God lost their life savings, according to prosecutors.
“Some of them had to declare bankruptcy; it wasn’t pretty,” said Assistant U.S. Attorney Jennie Waering.
About 140 investors entrusted up to $8 million to Warren and thought he had parlayed their investments into $20 million, she said. By the time investigators caught up to him last year, Warren, 53, of Troutville had $595,000 of the money left in his accounts.
“This was a despicable crime,” U.S. Attorney John Brownlee said after Warren entered his guilty plea in U.S. District Court in Roanoke. “It heightens the nature of the crime to use Christian trust to bilk his friends out of their life savings.”
Warren pleaded guilty to mail fraud, securities fraud and embezzlement on the day his six-week trial was to have begun. Warren agreed to a sentence of 21 years in prison, which a judge plans to impose in September. He also agreed to pay back as much of the invested money as he could.
In a nearly three-hour hearing yesterday, FBI special agent Dave Frey testified that Warren talked people into investing money with him by telling them he was a “financial pastor” with an exceptional ability to play the stock market.
In a scheme that began in the 1980s, Warren targeted churches and religious organizations in various states, including Virginia, by offering free financial seminars and workshops under the name Excellent Life Institute.
Warren told his victims he was investing their money in commodity futures, but in reality he was running an old-fashioned Ponzi scheme, paying off early investors with money given to him by new investors. He also spent some of the investors’ money on himself.
Because he constantly had to use new investment money to make monthly payments to the first investors to keep the scheme going, Warren was not able to squirrel away millions, Waering said. “He had a monthly overhead,” she said.