Fraud Scheme Uncovered

They are our nation’s heroes—often risking their lives abroad to protect us at home. Which makes what one Virginia con man did all the more despicable…defrauding military personnel and their dependents in an investment fraud scheme.

But one of his victims came forward and filed a complaint. And after a joint investigation conducted by the Richmond offices of the FBI and the U.S. Postal Inspection Service (USPIS)—under the auspices of the Virginia Financial and Securities Fraud Task Force—Vernon Matthews was charged in the scheme, pled guilty, and was recently sentenced to a federal prison term.

Matthews operated a company called First Capital Group (FCG), located in Virginia Beach. He had a license to sell insurance, not to give investment advice or handle securities—but that didn’t stop him from doing so. Starting in 2010 and continuing until early 2013, Matthews solicited members of the military and their families to make investments with FCG.

Often times, he set up booths at establishments known to be frequented by the military—like restaurants located near military bases—and offered promotions, like a free night at a hotel. And when potential victims came to his office to claim the prizes, Matthews would pitch them on an investment.

And he lied through his teeth while doing it. Among Matthews’ misrepresentations:

He received compensation from the U.S. government for his investment advice and services (he did not);
He would invest his clients’ funds in certificates of deposits, mutual funds, or something similar (Matthews misappropriated all the funds for his own personal or business use);
FCG was affiliated with several reputable investment companies and funds (it was not);
The investment provided a good return—anywhere from 4 to 300 percent—and was low-risk or no-risk (it did not and was not).

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