News Summary
Andrew H. Middlebrooks, a former CEO, has been sentenced to 100 months in prison for orchestrating a $39 million investment fraud scheme that deceived 97 investors. Pleading guilty to wire fraud charges, he misled investors with false promises of high returns while diverting funds for personal use, resulting in substantial financial losses. The FBI and SEC investigated the case, underscoring the growing issue of investment fraud in Michigan and emphasizing the need for investor protection and education.
Detroit, MI – Andrew H. Middlebrooks, a 33-year-old former CEO and chief investment officer of EIA All Weather Alpha Fund 1 Partners (EIA), was sentenced to 100 months in federal prison for his role in a $39 million investment fraud scheme. Middlebrooks pleaded guilty to wire fraud charges, which involved deceiving 97 investors with false promises of high returns from his investment fund.
Middlebrooks’ fraudulent activities, which spanned from May 2017 to May 2022, led to catastrophic financial losses for investors. He claimed he could leverage “inefficiencies” in global equity markets to generate significant profits. However, instead of realizing the promised returns, the fund suffered losses exceeding $27 million among its investors by 2022. When the fund ultimately collapsed, total losses exceeded $34 million.
Throughout the course of the scheme, Middlebrooks failed to disclose the fund’s failing status to current investors and actively solicited new ones. In a deceptive move in the fall of 2019, he fabricated a document claiming EIA had a cumulative return of 476.81%, misleading investors about the fund’s performance. Instead of securing investments for the fund, he diverted investor money for personal expenses and to support his wife’s online clothing business.
The FBI led the investigation into Middlebrooks’ fraudulent activities with assistance from the Securities and Exchange Commission (SEC). He was charged with wire fraud in October 2022 after the SEC uncovered the extent of the fraudulent scheme. In December 2022, Middlebrooks pleaded guilty to the charges, which carry a maximum sentence of 20 years in prison.
As part of his sentencing, U.S. Attorney Jerome F. Gorgon Jr. highlighted the sophistication of Middlebrooks’ methods used to defraud unsuspecting investors. He stated that the deceitful actions of Middlebrooks exploit the trust placed in him by investors, leading to significant financial devastation.
The case of Andrew Middlebrooks is indicative of a broader issue concerning white-collar crimes in Michigan. His fraudulent activities not only harmed individual investors but also reflect a growing trend of investment fraud in the region, with other individuals facing similar charges in recent times. It raises concerns about investor protection and the need for more stringent oversight in the financial sector.
Middlebrooks’ case serves as a reminder of the potential vulnerabilities in investment opportunities and the risks of falling victim to scammers promising unrealistically high returns. As authorities continue to crack down on fraudulent schemes, education and awareness among investors are crucial in preventing such scams in the future.
In summary, Andrew H. Middlebrooks has been sentenced to 100 months in prison for orchestrating a significant investment fraud scheme, deceiving investors with false information and misappropriating funds for personal use. As investigations into investment fraud remain a priority for federal authorities, this case underscores the importance of vigilance and accountability in the financial industry.
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Additional Resources
- Detroit News
- Wikipedia: Investment fraud
- CBS News
- Google Search: wire fraud schemes
- MLive
- Google Scholar: investment fraud
- Crain’s Detroit Business
- Encyclopedia Britannica: investment fraud
- Click On Detroit
- Google News: investment fraud Michigan
Author: STAFF HERE DETROITMI WRITER
DETROIT STAFF WRITER The DETROIT STAFF WRITER represents the experienced team at HEREDetroitMI.com, your go-to source for actionable local news and information in Detroit, Wayne County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Movement Electronic Music Festival, Detroit Grand Prix, and America's Thanksgiving Parade. Our coverage extends to key organizations like the Detroit Regional Chamber and Focus HOPE, plus leading businesses in automotive and healthcare that power the local economy such as General Motors, Ford Motor Company, and Henry Ford Health. As part of the broader HERE network, including HEREGrandRapids.com, HERENorthville.com, HERENovi.com, and HEREPlymouth.com, we provide comprehensive, credible insights into Michigan's dynamic landscape.
