Nearly a year after pleading guilty to wire fraud in a Ponzi scheme that defrauded several hundred of his clients, an East Cobb investment adviser was sentenced to federal prison this week. 
John Woods, who’s been active in Walton High School sports and civic affairs in East Cobb, will serve seven-and-a-half years, plus three years on supervised probation, according to the U.S. Attorney’s Office for North Georgia.
That’s where federal prosecutors presented evidence that Woods victimized more than 400 investors, at a cost of more than $49 million, over 13 years.
In 2021, the U.S. Securities and Exchange Commission shut down the Ponzi scheme, run out of a fund called Horizon Private Equity, promising rates of return of six to seven percent.
The U.S. Attorney’s Office said in a release Thursday that Horizon would invest the funds in government bonds, stocks, or small real estate projects, and that clients were assured the investments were safe “because Horizon maintained a diverse portfolio.”
But prosecutors said in court last year that those funds were used instead to repay other investors and that “Horizon was able to pay guaranteed returns to investors only by raising and using new investor money.”
The defrauded clients were sent monthly statements that did not disclose that their investments didn’t provide a return to cover the cost of interest.
“Although Woods did not use the money to live a lavish lifestyle, he diverted investor funds to pet projects not approved by the investors, such as purchasing an interest in a baseball team in his home town,” the release said.
Woods, a native of Chattanooga, was a minority owner of the Chattanooga Lookouts minor league baseball team.
Woods, 58, was formerly on the executive board of the Walton Touchdown Club and was a member of the original East Cobb Cityhood committee in 2019.
When the Ponzi scheme was shut down, the Securities and Exchange Commission estimated that Horizon investors were owed $110 million in principal payments.
The sentence handed down by U.S. District Court Judge Sarah E. Geraghty also requires Woods to pay restitution. A restitution hearing is scheduled for April 15.
“Woods abused the trust of his victims, including retirees, seniors, and military veterans, who lost their life savings and retirement accounts due to his greed,” U.S. Attorney Ryan Buchanan said in the release.
Related:
- Cobb State Court Clerk introduces QR codes to track cases
- Cobb Family Advocacy Center opens for domestic violence victims
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