After Shootout with FBI, Las Vegas Attorney Hit with Class Action Lawsuit Over $300M Ponzi Scheme

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A proposed class action aims to recover investments poured into a reported $300 million Ponzi scheme allegedly orchestrated in part by the Nevada-based Beasley Law Group PC and its namesake, who reportedly admitted to the scheme during a four-hour armed standoff with the FBI earlier this month. 

According to the 26-page lawsuit, defendant Michael W. Beasley’s trust account with Wells Fargo, who’s also named as a defendant, served as the entry point to the scam, which the case says was orchestrated by the Beasley firm, Jeffrey Judd and his entities, J&J Consulting Services Inc. and J&J Consulting LLC. 

The suit says that the entities marketed and sold interests in purported personal injury settlements while promising investors 10- to 20-percent returns to be paid every couple of months. Instead of investing the funds as represented, the conspirators “used the money in a classic Ponzi-like fashion, while drawing significant profits,” the complaint states. 

“Once the funds entered the firm’s trust account, the J&J Conspirators misused, diverted, and misappropriated the funds, as the purported settlements appear to have been entirely fabricated,” the case reads. 

The Wall Street Journal reported on March 23 that three FBI agents rang the doorbell of Beasley’s Las Vegas home on March 3 to question him about a “high-return, zero-risk investment plan” his law firm helped run. According to the WSJ, Beasley came to the door standing sideways, and when he turned to face the agents, he was holding a gun to his head. He then swung toward the agents and was shot twice before retreating into his house, a federal prosecutor relayed during a court hearing in early March, per the WSJ. Beasley was eventually brought out of his house alive by the FBI. 

From the WSJ report: 

“Bleeding from gunshot wounds in his chest and shoulder, he confessed: The investments were a Ponzi scheme, according to the prosecutor. Check his bank records, Mr. Beasley said, and it will all be clear.” 

The lawsuit argues that Wells Fargo, as a regulated bank, had “heightened duties” as far as knowing its customers, in particular law firms in possession of trust accounts for the benefit of others. The suit alleges Wells Fargo “undoubtedly noticed and flagged” the massive amounts of money in incoming investments and then the diversion of those funds into the accounts of “conspirators, brokers, and investors,” most of whom, the case says, had Wells Fargo accounts for this specific purpose. 

“Wells Fargo therefore knew that these investments into and out of a solo practitioner’s trust account amounted to fraud and breaches of the conspirators’ duties to the investors,” the lawsuit alleges. “Despite this knowledge, Wells Fargo did nothing except continue to facilitate the circular transfers and diversions of funds.” 

The lawsuit looks to represent all persons who invested in J&J Purchasing or J&J Consulting’s insurance settlement agreements through the Beasley Law Group IOLTA account and suffered damages. 

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