Alabama Ponzi Scheme Cases: The Promised Income and the Money That Paid It

In Alabama Ponzi scheme cases involving a Hoover broker and Heyman International, investigators described new investor money paying earlier investors’ returns. The Hoover criminal account described income from leased properties that did not exist. The Securities and Exchange Commission’s Heyman International complaint set high monthly return promises beside deposits in accounts that paid no interest. If you handled the deposits, explained the payments or knew the underlying business, you may recognize the gap before it appears in an investor’s statement.

This page follows the Alabama connections and payment trails in those cases, with a separate Georgia comparison involving First Liberty Building & Loan. Our explanation of how a Ponzi scheme works follows the shared mechanism. Here, the properties, agreements and bank accounts give it a local setting.

Hoover and 360 Properties: Rental Income Without Rentals

The Justice Department’s account of the criminal charging information and plea agreement described a Hoover broker offering stock-option investments and investments in 360 Properties, a company he owned. The documents described a scheme running from 2009 through May 30, 2014. The broker agreed to plead guilty to the charges.

According to those criminal documents, the broker told certain 360 Properties investors that leased-property income would fund their returns, although there were no leased properties. Some investors believed their investments were affiliated with MetLife, where the broker had worked, and he left that belief uncorrected. The rental income had no rentals.

The same account said about eighteen individual and family investors delivered more than $8.4 million between January 2009 and January 2014. The broker deposited the money into an account he held with his wife at BancorpSouth. He paid existing investors with new investors’ funds, moved money between the couple’s accounts and paid personal expenses. Only a small percentage went into the investments he had promised. When the scheme collapsed in May 2014, about twelve investors lost about $3.1 million, according to the criminal account.

The criminal charging information traced a deposit beyond the first receiving account. It charged that an investor wired $571,378 from Wells Fargo to the broker’s 360 Properties account at BancorpSouth on January 15, 2014, and that the broker wired $368,000 of that deposit to a second BancorpSouth account the same day.

The charging information also identified a particular investor who wired $100,000 after the broker promised a specific hedge-fund investment. It charged that he used the money for non-investment purposes. For someone who handled the transfer or answered that investor’s questions, the useful comparison is concrete: the promised investment, the receiving account and the actual use of the deposit.

The Federal Bureau of Investigation, the Alabama Securities Commission and the Hoover Police Department investigated the case. The Justice Department’s account said Hoover investigators took the initial report, recognized the extent of the fraud and contacted the other agencies.

Heyman International: High-Yield Promises, Non-Interest-Bearing Accounts

The Securities and Exchange Commission alleged that Heyman International offered written Depository Agreements promising a minimum return of 10% per month and full repayment of investors’ principal. In its civil complaint, the SEC alleged that the company’s president raised money from at least 150 investors beginning at least in 2001, with most living in and around Birmingham. The complaint also identified sales to residents of other states.

According to the Securities and Exchange Commission’s complaint, the agreement represented that the operator had access to proprietary high-yield accounts and trading programs in the United States and elsewhere. Investors received no other written information about their investment, the complaint alleged.

The Securities and Exchange Commission alleged that the operator instead pooled the deposits in non-interest-bearing company bank accounts that he alone controlled. It described the source of the supposed earnings this way:

The Securities and Exchange Commission alleged that new deposits supplied the money the trading pitch was supposed to earn. We see a high-yield promise backed by accounts that paid no interest.

The complaint further alleged that at least $1.3 million funded personal expenses, including luxury cars and expensive trips abroad. It said only approximately $1 million remained in the company accounts and that the company could not fully repay investors’ principal. In the complaint’s account, the promise to refund the investment remained in the agreement while the money went elsewhere.

The Securities and Exchange Commission alleged that investors had withdrawn retirement savings, sold land and used business assets to fund their investments. For an insider handling investor communications or the company accounts, the agreement and the payment history would describe opposite sides of the same transaction. In the alleged scheme, the investor saw a return. The account showed whose deposit supplied it.

First Liberty Offers a Georgia Comparison

First Liberty Building & Loan offers a Georgia comparison: the Securities and Exchange Commission alleged that some business loans existed, but new investor money kept payments going after borrowers defaulted. The agency’s account of its complaint identifies First Liberty as a Newnan, Georgia, business.

The Securities and Exchange Commission alleged that First Liberty and its owner raised at least $140 million from approximately 300 investors between 2014 and June 2025. They sold loan participation agreements and promissory notes, telling investors their money would fund short-term business loans. The pitch said borrowers would repay those bridge loans through Small Business Administration or other commercial financing.

Some bridge loans existed, the complaint alleged, but most ultimately defaulted and stopped paying interest. First Liberty allegedly kept paying investors, using new investor funds to support those payments since at least 2021. The private-note payment trail therefore reaches into the borrower’s records as well as the investor’s account: whether the borrower paid helps explain who actually funded the distribution.

What Are the Red Flags of a Ponzi Scheme?

The red flags of a Ponzi scheme in these cases are gaps between the promised source of income and the cash that actually funds investor payments. The Hoover criminal account described missing rental properties and deposits diverted from their promised investments. The Securities and Exchange Commission’s Heyman International complaint put high-yield promises beside non-interest-bearing accounts. Its First Liberty complaint described investor payments continuing after borrowers stopped paying.

Investment businesses create different records at each point in that flow. An offering agreement describes the intended use of the capital. Bank records show where the deposit went. Business receipts show whether the promised activity produced income, and distribution records show what investors received. The evidence behind the payment comes from connecting those records to the same investment.

Someone inside the business may also know who controlled the accounts, supplied the explanation for a payment or knew that the expected income had stopped. We work with that knowledge alongside the documents, because it can explain a transaction that looks ordinary on an investor statement.

Research supports taking that knowledge seriously. The Significance of Whistleblowing as an Anti-Fraud Measure, published in the Journal of Forensic & Investigative Accounting in 2018, examined a broad sample of 4,943 frauds. Whistleblowers detected 35.9% of that sample, compared with 21.4% detected through internal controls. The Alabama cases show the specific transactions an insider might be able to explain.

Whistleblower Awards for Securities Fraud

Securities fraud has an SEC whistleblower award program. Whistleblowers can share 10% to 30% of the sanctions collected in an SEC action over $1 million. An investor recovery and a whistleblower award address different interests: money returned for an investment loss and a reward for information that helps enforcement.

Fraud involving false claims for government money raises a separate question. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. We assess the conduct, the money and your knowledge together to identify the whistleblower opportunity supported by your facts.

You Know What Funded the Payments

If you know an Alabama investment operation paid returns from new deposits while telling investors a different story, talk with our whistleblower experts about the accounts and the promises. We develop the case strategy with you and bring in securities fraud whistleblower lawyers who understand investment offerings and diverted funds. Your knowledge of who controlled the accounts and explained the payments gives us a place to start, and we stay with you through the case.