Federal officials are not saying yet if more criminal charges are on the way related to Lubbock-based company Ferrum Capital LLC. However, they are saying they’ll continue efforts to recover millions of dollars for victims.
Representatives from the U.S. Attorney’s Office, IRS and FBI held a press conference in San Antonio Wednesday – the day after Lubbock businessmen Joshua Allen and Michael Cox were convicted in their securities fraud trial.
So far, four people have been convicted in what federal officials and numerous lawsuits described as a Ponzi scheme. They are:
- Joshua Allen – four charges including securities fraud
- Michael Cox – four charges including securities fraud
- Brooklynn Willy – ten charges including conspiracy
- Paula Vacek (Willy’s friend) – one charge, wire fraud
Allen and Cox’s business affiliate in San Antonio, Brooklynn Chandler Willy, pleaded guilty earlier this year, as did her close personal friend Paula Vacek.
Sentencing for Allen and Cox is set for Dec. 10 and they’ll remain in custody until that time. Sentencing for the two women is set for four days later.
When asked if more indictments could be expected, Justin Simmons, United States Attorney, said, “I’m not going to speak about anything related to any possible ongoing investigations.”
They will pursue recovering money for Ferrum Capital victims “as long as it takes.”
“We always go after the money and try to recover it. Ultimately … we have a financial litigation unit and an asset forfeiture unit … committed to that job alone.”
“We’re covering it through forfeiture of assets or just through pursuing defendants who have judgments against them for those amounts. … What kind of money they’ll actually have to pay those is unknown, but we will pursue that as long as it takes,” Simmons said.
No plea deal
Several people LubbockLights.com talked to about the case since we broke the story locally in late 2024, wondered why Allen and Cox didn’t take a plea deal like their San Antonio affiliate, Brooklynn Chandler Willy.
We asked Joseph Blackwell, the assistant United States attorney who prosecuted the case.
“They have a right to a trial,” Blackwell said, adding he could not speak to their decision-making process.
“Obviously, they’re here because of a series of very bad decisions, but they have a right to a trial. We respect that. My job was to give them a fair trial. The jury obviously saw the truth and held them accountable,” he said.
Blackwell was also asked about one of Allen’s defense attorneys – in his closing argument – mentioning the prosecution did not bring Willy into the trial. But in a pre-trial hearing August 7, the defense made it clear they did not want the jury to hear about her plea deal.
“There’s some latitude the defense has when making their arguments. The evidence was overwhelming in this case. It really was. We called close to 30 victims to testify about the lies that they were told. Between that and the financials that Special Agent (Rebecca) Jones expertly presented, the evidence was overwhelming,” Blackwell said.
“So I don’t begrudge defense counsel when you’re trying to make an argument to throw whatever you can out there. And they did the best they could under the circumstances,” he said.
More than money – people’s lives
Blackwell was asked about Richard Pickett, a San Antonio man who lost his $500,000 investment he needed to get a kidney transplant. He testified as a prosecution witness.
“That money was immediately stolen by the defendants, sent to an earlier investor and then they took some of the money for themselves,” Blackwell said, adding Pickett has not gotten a transplant.
“Money is not just money. It’s your life, it’s your future, it’s your grandkids’ future, it’s your retirement, it’s your health at times,” he said.
“For this victim, it was his health they stole from him. He was not able to get the medical care that he needed because of the actions of the defendants,” the prosecutor said.
Read our series on Ferrum
LubbockLights.com covered Ferrum for more than a year-and-a-half.
Click here to see our series of stories.
Ferrum ‘had one goal’
Before questions were fielded, representatives from the federal agencies made prepared statements.
The various Ferrum Capital entities had one goal, Simmons said.
“Line the pockets of Michael Cox and Joshua Allen. These funds were a giant Ponzi scheme, where funds invested by later investors were used to pay off earlier investors,” he said.
The defendants got a “handsome” fee and told multiple lies, he said.
“It was especially egregious because it made those investments sound safe,” said Simmons.
“One of the most disgusting aspects of this case and the lies they told was how they utilized their faith and reputation in their community to con investors. They prowled around like roaring lions, seeking those who they would devour, using various spiritual themes and developing trust with their victims,” Simmons said.
He called it the riskiest of investments, saying around $80 million was raised from investors and “conservatively, $50 million was lost across 500 victims.”
Another “conservative estimate,” he said, showed the defendants pocketed $9.2 million.
There is a narrative, Simmons said, the Department of Justice is no longer doing white-collar prosecutions, adding he hopes this case shows that’s not true.
Never wanted to be heroes
Troy Caldron, assistant special agent in charge for the IRS Criminal Investigation Texas Field Office, talked about victims who came forward.
“These are all people that never wanted to be heroes of the justice system. We interview them face to face. We see the pain,” he said, adding, “Thank you for your bravery.”
“All these victims have heartbreaking stories. We heard testimonies of decades of friendships and generations of friends being forever ruined. There are those who lost their life savings, those who bought into the scheme looking for hope in the face of medical ailments and financial despair,” he said.
It takes time to build a financial case, Caldron said.
“The verdict in this case is a culmination of years of criminal investigative work, tracing funds, interviewing the witnesses and defendants and gathering evidence,” he said.
“Investigating financial cases takes time. The numbers must add up and the monies must be traced account-to-account,” Caldron said, also complimenting Jones.
“We can’t undo suffering for the victims, but I hope they can find some solace knowing that there is justice in our country,” he said.
Alex Doran is assistant special agent in charge for the FBI San Antonio Division.
“Fraud cases matter,” he said, mentioning how the FBI often talks about how people can protect themselves from online fraud schemes from people “you’ve never met, most likely overseas.”
“But these individuals were taken advantage of and betrayed by those they knew and thought they could trust. That personal connection made the fraud especially devastating to the victims,” Doran said.
“The victims are not at fault here. Trust is not a weakness. Guilt lies with the people who chose to deceive and exploit that trust,” he said
Press release
Lubbock Ponzi Schemers Face Up to 70 Years in Federal Prison Following Guilty Verdict in San Antonio
August 19, 2026
SAN ANTONIO – A federal jury convicted two Lubbock men in San Antonio Tuesday afternoon for their roles in a massive Ponzi fraud scheme with their already convicted co-defendant Brooklynn Chandler Willy of San Antonio, announced U.S. Attorney Justin R. Simmons for the Western District of Texas.
According to court documents and evidence presented at trial, 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 pleaded guilty to 10 counts in March, 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.
Allen, Cox and Willy conspired to mislead the victims concerning the security of the investments and concealed their high commissions. Additionally, Allen and Cox 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 benefited the co-conspirators themselves.
On Tuesday, concluding a weeklong trial presided over by U.S. District Judge Fred Biery, the jury convicted both Allen and Cox of all four counts: conspiracy to commit wire fraud, conspiracy to commit money laundering, conspiracy to launder monetary instruments, and securities fraud.
“In the midst of this Ponzi scheme, Allen and Cox collected a handsome fee by telling various egregious lies, even using their self-proclaimed faith and reputation in their community to con the investors they victimized,” said U.S. Attorney Simmons. “This case shows that within the Western District of Texas and across the Department of Justice, we are resolved to prosecute cases like these where individuals have preyed on the innocence and trusting nature of everyday Americans as Michael Cox and Joshua Allen did here.”
“This case took years to unravel: tracing the money, interviewing witnesses, and working with our FBI partners to find more victims of this despicable Ponzi scheme. Allen and Cox preyed on their closest friends, their community, and many others across the country. They took millions of dollars to enrich themselves while devastating lives along the way. To say they violated trust is grossly insufficient — they destroyed it,” said Special Agent in Charge Christopher J. Altemus Jr. of IRS CI’s Texas Field Office. “Our work with the FBI and the U.S. Attorney’s Office cannot undo the victims’ suffering, but this verdict may provide some measure of satisfaction that these criminals will pay for their financial crimes. The women and men of IRS-CI will continue to band together with their law enforcement partners to pursue those who commit financial crimes and steal from trusting individuals.”
“These convictions send an important message,” said FBI San Antonio Special Agent in Charge Daniel Faith. “When someone chooses greed over integrity and abuses the trust of others for illicit personal gain, there are serious consequences.”
Now convicted on all four counts, Allen and Cox both face up to 70 years in prison. They were taken into federal custody immediately following the verdict. Their sentencing hearings have not been scheduled at this time.
Willy’s sentencing hearing is scheduled for Dec. 14. She faces up to 20 years in prison on each of the six wire fraud charges, on the one wire fraud conspiracy charge, and on the one money laundering conspiracy charge. She also faces up to 10 years for engaging in monetary transactions in property derived from the wire fraud scheme and a mandatory minimum of two years in prison for aggravated identity theft, which, by statute, would run consecutive to any other punishment.
IRS-CI and the FBI investigated the case.
Assistant U.S. Attorneys Joe Blackwell and Sam Shapiro are prosecuting the case.
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