1 Global Capital

Quick summary on 1 Global Capital

1 Global Capital, a commercial lending firm based in Hallandale Beach, Florida, has been embroiled in significant legal and regulatory issues, leading to severe consequences for its leadership and investors.

 Securities Fraud Scheme

Indictment and Plea: In July 2023, Carl R. Ruderman, the former chairman of 1 Global, was indicted for orchestrating a $250 million securities fraud scheme. He pleaded guilty in October 2023 to conspiracy to commit securities fraud, admitting to misleading investors about the company’s profitability and misappropriating funds for personal expenses.

Sentencing: On January 31, 2024, Ruderman was sentenced to five years in prison and ordered to pay a forfeiture money judgment of $285,599,532. Four co-conspirators, including the former CFO and two attorneys, also pleaded guilty and received sentences ranging from 8 months to 60 months in prison.

 Investor Misrepresentation

False Assurances: Investors were misled with assurances of audited financials, high returns, and the use of funds for merchant cash advance loans. In reality, the company diverted funds for personal luxuries and unauthorized business ventures.

Bankruptcy Filing: Facing mounting legal challenges, 1 Global filed for bankruptcy on July 27, 2018. At that time, the company had over 3,400 investors and had raised more than $250 million.

Regulatory Violations

Securities Law Evasion: The company attempted to circumvent federal securities laws by obtaining false legal opinions, allowing it to operate without the necessary registrations and disclosures required for securities offerings.

Legal Consequences: The fraudulent activities led to civil fraud actions by the U.S. Securities and Exchange Commission (SEC) against 1 Global and its executives, further complicating the company’s legal standing.

Financial Mismanagement

Personal Expenditures: Ruderman used investor funds for personal expenses, including credit card payments, vacations, and luxury items, diverting resources meant for business operations.

Diversion to Personal Ventures: Investor money was also funneled into businesses benefiting Ruderman and his family, without the investors’ knowledge or consent.

Legal Actions and Penalties

Co-Conspirator Sentences: Co-conspirators, including the former CFO and attorneys, received prison sentences and were ordered to pay restitution, highlighting the extensive legal repercussions of the scheme.

Ongoing Bankruptcy Proceedings: The bankruptcy case remains pending, with efforts to resolve claims from over 3,400 investors who were defrauded.

These developments underscore the severe legal and financial repercussions faced by 1 Global Capital and its leadership due to fraudulent activities and regulatory violations.