A Florida executive whose family business once owned Playgirl magazine has pleaded guilty to conspiring to commit securities fraud for misleading investors in another of his companies, a company that made high-interest loans to small businesses.
Carl R. Ruderman, 82, was chairman and CEO of 1 Global Capital LLC, a commercial lending company that filed for bankruptcy in July 2018. Federal authorities said he participated in a $250 million scheme that affected more than 3,400 investors in 42 states.
Ruderman pleaded guilty Thursday in federal court in Miami. Court records show sentencing is scheduled for Jan. 3. He faces up to five years in prison and the forfeiture of more than $250 million.
Ruderman admitted to spending the money from 1 Global investors on credit card payments, vacations, drivers, nannies, housekeepers, college tuition, mortgage payments, luxury car payments and insurance payments on his art collection and jewelry, the Justice Department said in a news release Friday
Ruderman also admitted that he diverted investor funds to companies that benefited him and his family without the investors’ knowledge, the department said.
The company, based in Hallandale Beach, Florida, made loans to small businesses called merchant cash advance loans. Prosecutors compared these to short-term loans.
The Justice Department said Ruderman admitted that he and others made false statements to investors and potential investors about 1 Global’s profitability. Investors were falsely told that the company had been audited by an accounting firm, that investors’ money would be spent on cash advance loans from traders, and that investors could expect double-digit returns on investment.
The Securities and Exchange Commission said in a 2018 complaint against Ruderman and 1 Global that the company raised money from investors, many of whom were using retirement savings, from February 2014 to July 2018.
The SEC said 1 Global was founded in 2013 and is owned by the Ruderman Family Trust. The SEC said the trust also owned other companies, including Digi South, which “formerly owned Playgirl and other adult magazines.” Digi South used the same address as 1 Global and “received approximately $805,000 in investor funds from 1 Global without compensation or legitimate services,” the SEC said.
Four of Ruderman’s co-conspirators had previously pleaded guilty for their roles in the 1 Global fraud, the Justice Department said.
Alan G. Heide, 65, of Lake Worth, Florida, the former chief financial officer of 1 Global, pleaded guilty in 2019 to conspiracy to commit securities fraud. He was sentenced to five years in prison and ordered to pay more than $57 million in restitution.
Andrew Dale Ledbetter, 81, a lawyer from Fort Lauderdale, Florida, pleaded guilty in 2021 to conspiracy to commit wire fraud and securities fraud. He was sentenced to five years in prison and ordered to pay more than $148 million in restitution.
Steven Allen Schwartz, 78, of Delray Beach, Florida, a director and consultant at 1 Global, pleaded guilty in 2020 to conspiracy to commit wire fraud and securities fraud. He was sentenced to two years in prison and ordered to pay more than $36 million in restitution.
Jan Douglas Atlas, 78, of Fort Lauderdale, Florida, an attorney, pleaded guilty in 2019 to conspiracy to commit wire fraud and securities fraud. He was sentenced to eight months in prison and ordered to pay more than $29 million in restitution.