Josh Allen and Mike Cox were charged in federal court of running a “massive Ponzi fraud scheme” costing hundreds of people millions of dollars.
If the Lubbock businessmen are convicted on all charges they could spend up to 70 years in prison, according to a Department of Justice press release.
Allen and Cox turned themselves in Wednesday according to two attorneys close to the case. They were co-owners of Lubbock-based Ferrum Capital and appeared before U.S. Magistrate Judge Henry Bemporad. The charges were filed July 2.
Since 2023, numerous lawsuits across Texas accused the two of securities fraud and more.
“The indictment alleges that Allen, Cox and Willy misled the victims concerning the security of the investments and concealed their high commissions. Additionally, Allen and Cox allegedly lied about the nature of the investments,” the press release said.
Previous court records indicated almost 400 people or businesses lost money with Ferrum as revealed when Cox filed for bankruptcy in 2024. The dollar figure was more than $80 million – listing victims mostly from Lubbock, San Antonio and other parts of Texas.
The federal statement was less specific, instead saying, “Hundreds of victims collectively lost millions of dollars. Much of that money went to pay earlier investor-victims, thereby concealing the scheme and attracting additional victims.”
A copy of the indictment against Allen and Cox was not yet available. We’ll continue to provide updates as soon as possible.
Up until now, only one person was previously charged with a crime. Brooklynn Chandler Willy was indicted for securities fraud and obstruction of an FBI investigation. Her indictment revealed an ongoing FBI investigation in both Lubbock and San Antonio.
Read more:
- Click here to see our extensive coverage of the Ferrum Capital case, which we originally broke on December 23.
- Click here to see an updated story of the Willy case from the San Antonio Express News
- Click the title directly below to read the press release from federal prosecutors.
2 Lubbock Men Indicted with Brooklynn Chandler Willy for Allegedly Defrauding Hundreds of Victims
SAN ANTONIO – Two Lubbock men made their initial appearances in a federal court in San Antonio today after a federal grand jury returned an indictment on July 2 charging them for their alleged roles in a massive Ponzi fraud scheme with co-defendant Brooklynn Chandler Willy of San Antonio.
According to the indictment, Joshua Allen and Michael Cox jointly owned and controlled four investment companies: Ferrum Capital LLC, Ferrum II LLC, Ferrum III LLC, and Ferrum IV LLC. Allen, Cox, Willy and others acting at their direction, solicited victims to invest in these entities. Willy, who was arrested in December on separate obstruction and fraud charges, was the owner of Chandler Capital Holdings and Queen B Advisory LLC doing business as Texas Financial Advisory (TFA). Among other services, TFA purported to provide asset management and financial planning services.
The indictment alleges that Allen, Cox and Willy misled the victims concerning the security of the investments and concealed their high commissions. Additionally, Allen and Cox allegedly lied about the nature of the investments. Hundreds of victims collectively lost millions of dollars. Much of that money went to pay earlier investor-victims, thereby concealing the scheme and attracting additional victims. Much of the money also directly benefitted the now indicted co-conspirators and their associates.
Allen, Cox, and Willy are each charged with one count of conspiracy to commit wire fraud, one count of conspiracy to commit money laundering, one count of conspiracy to launder monetary instruments, and one count of securities fraud.
Allen and Cox made their initial court appearance today before U.S. Magistrate Judge Henry Bemporad. If convicted on all charges, they face up to 70 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Justin R. Simmons for the Western District of Texas made the announcement.
The FBI and IRS-CI are investigating the case.
Assistant U.S. Attorneys Joe Blackwell and Kelly Stephenson are prosecuting the case.
Source: Office of U.S. Attorney for the Western District of Texas.
This story was posted as breaking news and updated.
