Alleged Asheville Ponzi schemer pleads guilty in federal court

Jason Sandford

Jason Sandford is a reporter, writer, blogger and photographer interested in all things Asheville.

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The Asheville Citizen-Time’s Jon Ostendorff reports:

A city businessman pleaded guilty to running a Ponzi scheme that cheated investors out of $13 million over the last decade, according to federal court papers.

James W. “Bill” Bailey Jr. told the court he was guilty of securities fraud, mail fraud and filing false tax returns on Wednesday.

He has not been sentenced though he could face up to 43 years in prison, according to his plea agreement with the government.

And here’s the note I just received from an anonymous writer claiming to be the whistleblower:

I would rather not mention my name.  However, I am the person who turned in Mr. Bailey.  I am a financial planner in another city and I uncovered Mr. Bailey’s Ponzi Scheme.  I discovered his scheme while analyzing the “so called” investments he had made on behalf of two people that were referred to me.

I had spoken to him several times, but I spoke to his assistant even more.  She was very polite and tried to have an answer for everything.  But time and time again, I tried to warn her that something wasn’t right and that I thought he was in charge of a Ponzi Scheme.

While there is no need to go into all that I uncovered, most of it has been mentioned in the article above.  Some of the most serious charges may actually come from the false tax returns he filed on belhalf of his clients.  Regardless, I expect that Mr. Bailey will spend the rest of his life in prison by the time all is said in done.  I found it interesting that Mr. Bailey had no pending investigations with the State Securities Board prior to my complaint.

My Broker-Dealer and I formally requested the investigation and told them of my findings in July, 2010.  It appears as though it took them 6 months to make their case.  On behalf of Financial Planners all accross the country, I am truly sorry for anyone that lost their money with this man.

Hopefully, the state will be able to sell off his properties and get enough money to reimburse everyone.  Again, I am truly sorry for everyone’s loss.