CA Ponzi Scheme Suspect Flees From FBI In Underwater Sea Scooter

SHASTA COUNTY, CA — A suspect briefly eluded FBI agents Monday morning after submerging himself into the frigid waters of Lake Shasta with an underwater "sea scooter." The Shasta County man was wanted for taking part in a suspected $35 million Ponzi scheme, authorities said.

Mathew Piercey, 44, of Palo Cedro, near Redding, was arrested Monday, despite his rash attempt to flee from the law. Last week, a grand jury indicted Piercey and his business partner, Kenneth Winton for laundering money, wire fraud, mail fraud, and witness tampering, federal prosecutors said.

Winton, 67 of Oroville, was charged separately on suspicion of conspiracy to commit wire fraud, authorities said.

The daring pursuit unfolded Monday morning when FBI agents attempted to arrest Piercey, who immediately fled, leading agents on a winding chase through several residential neighborhoods and went off-road a few times, according to court documents.

Piercey eventually drove his truck onto the I-5 highway as law enforcement kept eyes on him from the air. Piercey eventually exited and ditched his truck near the edge of Lake Shasta, where agents watched him pull a device out of it and swim into the lake, according to court documents.

The device was a Yamaha 350LI underwater "water scooter," which allowed Piercey to submerge himself into the freezing waters of the reservoir. But his attempt didn't go as planned as Piercey was only able to remain submerged for approximately 25 minutes.

When he finally emerged, agents seized him and his water scooter. Medical personnel and Piercey himself confirmed that he "was fine" and not suffering from hypothermia. Shortly after, agents were able to get some dry clothes from Piercey's wife and allow him to change before arresting him and taking him to Sacramento.

Piercey is considered a "flight risk" by federal prosecutors for his attempt to evade law enforcement and attempts to tamper with witnesses, authorities wrote in court documents.

"There are no conditions, or combination of conditions, of release that can assure Piercey’s appearance and eliminate the serious risk that Piercey will obstruct or attempt to obstruct justice," federal prosecutors wrote on Tuesday.

From July 2015 through August 2020, Piercey reportedly carried out an investment fraud scheme that garnered $35 million in investor funds, according to court documents.

"Piercey entered a pattern of paying old investors lulling payments with new investor funds while making various false and misleading statements, half-truths, and omissions to raise new money and to hide the constant downward financial spiral," federal prosecutors wrote, describing Piercey's "sole occupation."

Piercey allegedly used Family Wealth Legacy and Zolla to solicit money from investors using a menagerie of misleading statements, including algorithm trade, different companies' investment strategies, and liquidating investments.

In one instance, Piercey reportedly solicited investor money for a fraudulent "Upvesting Fund," under the guise of an algorithmic trading fund with "a history of success." He later admitted there was no such fund, according to court documents.

Piercey recruited Winton as an investor to assist with raising these funds and to manage their dealings with Zolla, court documents read.

From 2018 to 2020, Winton and Piercey collaborated to push these false narratives on investors to raise more money. The suspects used some of these funds to pay off other investors in what is called a Ponzi scheme, authorities said.

The Oxford Dictionary defines a Ponzi scheme as "a form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors."

Using this scheme, they reportedly paid back $8.8 million to investors, authorities said.

In addition to all of this, Piercey allegedly learned in March that a grand jury had subpoenaed his companies, so he sent letters back to investors, claiming the subpoenas were due to "his outreach to the president with a bold proposal to rescue the country's banking system," according to court documents.

"The only way out is for Banks to open Zolla accounts and stop the bleeding," Piercey wrote to investors, adding, "I have already sent this letter to President Trump, and I would encourage you to send this to President Trump as well here: whitehouse.gov/contact [feel free to copy/paste or drop it in the mail]. In light of our emboldened focus to rescue the banking system, be advised I anticipate potential new levels of regulatory scrutiny. If you have any connections or contact with government workers please let me know," according to court documents.

The full court document can be found here.

Piercey was scheduled for his arraignment Tuesday and Winton was scheduled for an appearance in court on Thursday.

Piercey could face a maximum statutory penalty of 20 years in prison if convicted and a fine of up to $250,000, "or twice the gross gain or loss, whichever is greater, for each wire fraud and mail fraud count; 20 years in prison and a fine of up to $250,000 for each witness tampering count; and 20 years in prison and a fine of up to $500,000 or twice the value of the property involved, whichever is greater, for each money laundering count," federal prosecutors said.

Winton, if convicted, could face a maximum of 20 years in prison and a fine of up to $250,000 or twice the gain or loss, whichever is greater, authorities said.