Source: US FBI
DETROIT – Andrew H. Middlebrooks, the former majority owner, chief executive officer, chief investment officer, and portfolio manager of EIA All Weather Alpha Fund 1 Partners (EIA), has been sentenced to 100 months in federal prison after having pleaded guilty to charges of Wire Fraud for devising and executing a scheme to obtain over $39 million from investors by means of false and fraudulent material pretenses, representations, and promises, announced United States Attorney Jerome F. Gorgon, Jr.
Gorgon was joined in the announcement by Reuben Coleman, Acting Special Agent in Charge of the Federal Bureau of Investigation.
During the scheme to defraud Andrew H. Middlebrooks, age 33, was the majority owner, chief executive officer, and portfolio manager for EIA All Weather Alpha Fund (EIA). Middlebrooks solicited clients for EIA by telling them he was able to exploit “inefficiencies” in global equity markets which would result in large returns for investors. But the EIA’s fund failed to produce the predicted returns and suffered catastrophic losses.
Instead of informing EIA’s existing investors that the fund was failing, Middlebrooks solicited new investors with false statements about the fund’s performance and lulled existing investors by lying to them about the returns their investments generated. Middlebrooks also created and distributed false documents claiming that EIA’s performance was exceptional. In one document, created in the fall of 2019, Middlebrooks falsely claimed that EIA’s track record included a cumulative return of 476.81% with 81.82% of monthly trading showing a profit. Eventually, Middlebrooks’ scheme collapsed, resulting in losses to 97 investors exceeding $34 million.
“This financial charlatan used sophisticated methods and a complex web of deception to trick unsuspecting victims into trusting him with their money. Con artists like this will be prosecuted to the full extent of the law,” said United States Attorney Jerome F. Gorgon Jr.
“The sentencing of Andrew Middlebrooks underscores the significance of white-collar crimes and the lasting harm they impose on hard-working Americans” said Reuben Coleman, Acting Special Agent in Charge of the FBI Detroit Field Office. “White-collar crimes threaten the integrity of our financial systems and undermine the trust and security of communities. The FBI in Michigan will continue to investigate those who violate federal laws and ensure they are held accountable. I want to thank the dedicated members from our FBI Detroit Field Office and our partners at the U.S. Attorney’s Office for the Eastern District of Michigan for their tireless work in bringing this case to justice.”
The investigation of this case was conducted by the Federal Bureau of Investigation. Both the United States Attorney’s Office and the Federal Bureau of Investigation wish to acknowledge and thank the Securities and Exchange Commission for its assistance.