Miles Burton Marshall, a 74-year-old New York tax preparer, pleaded guilty to grand larceny, securities fraud under the Martin Act, and scheme to defraud charges for operating a $50 million Ponzi scheme that ran from the early 1990s until 2023. New York Attorney General Letitia James said the scheme, known as the 'Eight Percent Fund', affected 988 investors across Madison County and nearby areas, with Marshall using new investor funds to pay earlier participants while diverting substantial amounts toward personal spending including shopping, restaurants, travel, and yoga studio activities. The case represents a decades-long affinity fraud operation where Marshall exploited trust built through his legitimate tax preparation and insurance services to convince clients to invest in what he falsely claimed were profitable real estate projects promising eight percent annual returns.
Marshall Operated Scheme From Early 1990s Until 2023 Bankruptcy
According to prosecutors, Marshall convinced clients beginning in the early 1990s to invest in what he claimed were profitable real estate projects involving rental property purchases and refurbishments. Investors were promised annual returns of eight percent, a yield that appeared stable enough to attract retirees, local families, and long-term clients who already trusted Marshall with tax preparation and insurance services.
Authorities said the operation instead functioned as a classic Ponzi scheme where newer investor funds were used to pay earlier participants while Marshall allegedly diverted substantial amounts toward personal spending and unrelated business expenses. Officials said Marshall used investor money on shopping, restaurants, travel purchases, and yoga studio activities, alongside operational costs tied to other businesses.
Investigators also alleged he directed employees to create fake account summaries showing fabricated balances and investment returns. Attorney General James said: "Miles Burton Marshall scammed his clients out of their life savings and used their hard-earned money to fuel a classic Ponzi scheme."
The scheme allegedly survived multiple market cycles, including the dot-com crash, the 2008 financial crisis, the pandemic-era volatility surge, and the sharp interest rate shifts of recent years. The operation eventually collapsed after Marshall filed for bankruptcy in 2023.
Scheme Liabilities Exceeded $90 Million When Bankruptcy Filed
According to the Attorney General's office, Marshall's liabilities exceeded his assets by more than $40 million as early as 2016. Despite that imbalance, authorities said he continued soliciting investments while telling existing clients their investments remained profitable.
In bankruptcy proceedings, prosecutors said Marshall acknowledged owing more than $90 million to investors when accrued interest obligations were included. Authorities estimated his remaining assets at under $22 million.
Marshall Faces Four to Twelve Years in Prison Under Plea Agreement
Marshall is expected to receive a prison sentence ranging from four to 12 years under the plea agreement announced by the New York Attorney General's Office. Prosecutors also said he must enter judgments in favor of victims totaling approximately $90 million, including principal and interest.
The investigation involved the New York State Attorney General's Criminal Enforcement and Financial Crimes Bureau alongside the New York State Police, FINRA's Criminal Prosecution Assistance Group, and the U.S. Securities and Exchange Commission.
FAQ
What was the 'Eight Percent Fund' Ponzi scheme operated by Miles Burton Marshall?
The 'Eight Percent Fund' was a Ponzi scheme operated by Miles Burton Marshall from the early 1990s until 2023, in which he convinced 988 investors across Madison County and nearby areas to invest in what he falsely claimed were profitable real estate projects involving rental property purchases and refurbishments. Marshall promised annual returns of eight percent but instead used new investor funds to pay earlier participants while diverting substantial amounts toward personal spending including shopping, restaurants, travel, and yoga studio activities.
How did the Ponzi scheme collapse?
The scheme collapsed after Marshall filed for bankruptcy in 2023. According to the Attorney General's office, Marshall's liabilities exceeded his assets by more than $40 million as early as 2016, but he continued soliciting investments while telling existing clients their investments remained profitable. In bankruptcy proceedings, prosecutors said Marshall acknowledged owing more than $90 million to investors when accrued interest obligations were included, while his remaining assets were estimated at under $22 million.
What sentence does Miles Burton Marshall face for the Ponzi scheme?
Marshall is expected to receive a prison sentence ranging from four to 12 years under the plea agreement announced by the New York Attorney General's Office. Prosecutors also said he must enter judgments in favor of victims totaling approximately $90 million, including principal and interest.
