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Our law firm is currently investigating claims on behalf of investors who sustained losses by investing with Frederick Darren Berg in the Meridian Fund. Frederick Darren Berg was charged with defrauding investors of about $100 million in a Ponzi scheme involving his Meridian Mortgage funds. In August of 2011, he pleaded guilty to wire fraud, bankruptcy fraud and money laundering, according to documents filed in U.S. District Court. With the plea deal, Berg is expected to spend 18 years in prison, according to the U.S. Attorney’s Office.
Berg, whose array of Meridian Mortgage investment funds began to collapse in mid-2010, was charged with siphoning off millions of dollars from the investment funds to finance his luxurious lifestyle, the creation of a high-end motor-coach company, and the acquisition of a Mercer Island home, two yachts and two jets.
Prosecutors said he used the incoming money from some investors to pay off earlier investors, maintaining the illusion that his funds were investing in real estate and earning steady high returns.
However, according to the indictment, after a while, Berg “never purchased any assets as promised” to investors, and instead “fabricated false records for many of the seller-financed real-estate contracts and loans purportedly purchased or financed by the funds.”
The court-appointed bankruptcy trustee for Berg’s mortgage funds informed investors that the Meridian funds took in about $160 million of investor’s cash, and at their downfall showed a balance of $210 million, including phony earnings. The trustee calculates that more than $100 million was misappropriated and the assets recovered may total $27.7 million.