Judge orders no release in Ponzi case

A federal judge found Kevin B. Merrill to be a flight risk and ordered the wealthy Towson businessman to remain locked up until his trial for allegedly running a $364 million Ponzi scheme.

In his order Thursday, Magistrate Judge A. David Copperthite said he found strong evidence that Merrill, 53, doctored bank records and swindled investors.

“The documents are incredibly strong. People may not tell the truth, but documents can't lie,” the judge said. “This is perhaps, and I think I'm pretty secure in saying this, the largest Ponzi scheme ever prosecuted in this court.”

Tall and thin, Merrill was led into U.S. District Court in Baltimore in handcuffs. He wore eyeglasses and a maroon prison jumpsuit. He did not address the judge.

Federal prosecutors say he ran the elaborate Ponzi scheme over the past five years, duping investors around the country and using their money to buy himself million-dollar homes and exotic sports cars.

Federal agents arrested him Tuesday at his home in Ruxton. They found $500,000 in cash inside a safe, Assistant U.S. Attorney Joyce McDonald told the judge.

Merrill and his business partner, Jay Ledford, of Texas and Nevada, are both charged with wire fraud, identity theft and money laundering.

In court Thursday, McDonald said Ledford was the gambler of the pair, spending lavishly in Las Vegas casinos, while Merrill collected extravagant cars and homes, including a $380,000 speedboat.

“We're looking for the boat,” she said. “We have not yet located all the vehicles.”

She said Merrill has flown to Dubai and Singapore to lure wealthy investors. She said he also made trips to Geneva, Switzerland. FBI agents still are working to find all his bank accounts.