‘They robbed people blind,’ says upset Lubbock attorney representing dozens in Ferrum Capital case

Ed Price, staff photo.

Up to 10 people associated with Ferrum Capital could face criminal charges, according to what Lubbock attorney Ed Price said he was told by a federal prosecutor.

So far, only one person in San Antonio has been charged, but legal wrangling continues in criminal court, bankruptcy court and multiple lawsuits.

Price is working with lawyers from San Antonio to represent between them more than 70 clients who have lost millions.

In an interview this week, Price had a lot to say:

• Mike Cox – one of Ferrum’s two principals – used the Fifth Amendment “at least 50 times” during a deposition, claiming he was also a victim.
• One of Price’s clients lost around $5 million. They knew Josh Allen – Ferrum’s other principal – since he was born and trusted him.
• Price was upset both men had open Bibles in their offices, using faith to build trust.
• Price heard a group of people believe claims against Ferrum are a “witch hunt.”
• A forensic analysis, Price claimed, showed some money never got into any investment.
• This case has left Price disgusted and pushed up his plans to retire once it’s done.

“I don’t understand how you can do that to somebody else, particularly elderly folks – take their life investment and reduce several of them to poverty – make one guy homeless,” said Price.

LubbockLights.com has reached out to attorneys for Cox and Allen many times since our coverage began in December. They have not responded.

‘Robbed these folks blind’

Some of the details are found in Cox’s ongoing bankruptcy case. His bankruptcy petition said he owed nearly 400 people or businesses roughly $59 million. Since then, more claims were filed, possibly bringing the total to more than $82 million. Price thinks it could grow to $100 million as the investigation continues.

“The more we dig into this, the more I’m convinced we’ve just got people here that robbed these folks blind,” Price said.

Besides Cox invoking the Fifth Amendment repeatedly during a deposition in one of the many lawsuits, Price said Cox feels he’s a victim.

“No remorse! He was almost indignant that we were taking his deposition. Again, I think he believes he’s as much a victim as any of these folks. I think he believes it. I think both he and Josh Allen believe they are good Christian men under attack by the devil,” Price said.

“Cox is telling everybody he’s a victim, that he didn’t know anything about this being a bad investment – about Collins being the bad guy – that he got sucked in just like all of these poor people,” Price said. (See below)

“If you can believe this, there’s, I think, a fairly large group of people at [a church-connected school] that believe this is all a witch hunt after Josh Allen – that he’s being persecuted for no reason. I heard that as recently as last week,” Price said.

Husband & wife lose $5 million

Some of the people who gave Allen money have known him a long time. A couple who’ve known him since birth lost more than $5 million.

They handed over money to Ferrum as a loan. Ferrum turned over the money to Texas-based Collins Asset Group which claimed it could purchase distressed debt for pennies on the dollar. Folks were told if Collins could collect the debt, it would be highly profitable.

“They’ve known the Allens forever … watched him grow up, thought he was a fine young man. … So, they started investing,” Price said.

“The thing you got to remember about every one of these people is they would get a statement. … There would be a statement that they could hold and look at that. … It gave them a false sense of security that, ‘Hey, I’m in good shape. I got this. Look at my statement,’” Price said.

But it got even worse for this couple who are Lubbock business owners. During COVID, the federal government offered Economic Injury Disaster Loans.

“Josh had an idea for them. Why don’t you borrow this low-interest money? Put that in our program. So, they did. $1.2 million they borrowed and put in the Ferrum program,” Price said.

Ferrum defaulted in late 2023. But the loan payments keep on coming.

This couple will get by, Price said, “But they can’t retire. They gotta keep working at least ’til that’s paid.”

“There’s another couple that had known Josh his whole life from the time he was born. Trusted him completely. They put every dime they had in it, and now they’re living on Social Security. … He is 73. She is 69,” Price said.

Another couple with teenage kids got to know Cox.

“They had saved up by working extra jobs … $200,000 total in their savings. This young man was mentored by Michael Cox – went to Bible study with him, played golf with him. Michael Cox took him under his wing. Cox found out they had $200,000 saved up to invest, and this young man asked him, ‘What should I do with this?’ And Cox said you need to put it in Ferrum,” Price said.

“I could give you probably 20 examples just like that,” he added.

‘This tipped me over the edge’

All of this has Price moving toward retirement.

“This tipped me over the edge. I’ve been considering retirement for a while. I’ve been working on this case since basically February, and this tipped me over the edge. I’ve sold my building. And as soon as I get everything wrapped up, I’m out of here. I’ve been practicing for 43 years,” Price said.

He’s defended criminal defendants including death penalty cases.

“You find a sense of humanity in everybody you ever meet, even those kind of people,” Price said.

“It could be that they thought they were helping these people. But I don’t know how you justify in your mind taking a commission when you say you won’t. And our forensic analysis has indicated that there was a bunch of money taken that never got into any investment,” Price said.

There was a 10 percent commission when money was put in and another 10 percent for any money that came back out, Price said. (He also claimed Collins was allowed to skip out on paying back 35 percent – and that’s before things fell apart.)

“Just can’t do it anymore. My wife and I have been doing this together for 35 plus years. She’s my paralegal. I just can’t put her through it anymore either. Just can’t do it,” he said.

Not the first time

Collins Asset Group was sued in 2020 and forced to settle a class-action lawsuit in Atlanta for less than $16 million. An attorney who spoke with LubbockLights.com in December, Matthew King, said that should have been the end of it.

Collins had been working with a company called Sonoqui LLC. Sonoqui went away and that’s about the time Ferrum got more active, according to King.

The founder of Sonoqui was, according to the federal settlement, Daryl Bank. He was sentenced to 35 years in federal prison for conspiracy and wire fraud.

We asked Price how this could keep going.

“If you’ve got enough money to be a big con man, you shift states,” Price said.

He named off various states including Texas, Wisconsin, Florida, and Georgia. New York might be on the list too.

“If the feds don’t get wind that this is a nationwide situation, why would they shut anything down? … The key being if you know Collins Asset Group is misbehaving. Who are federal regulators? They’re people. You got to find somebody that picks up on it and says, ‘Wait a minute, this is a bad guy,’” Price said.

“You just keep shifting and doing it again, and doing it again until somebody stops you. … I believe we’re on the verge of that with Josh Allen, Brooklynn Willy and Michael Cox,” Price said.

Price would like to see Walt Collins indicted too.

“He’s the root problem,” Price said.

Viaticals and a hospital bed

Allen sold a viatical settlement to the same couple who lost more than $5 million, Price said.

A viatical is a life insurance agreement.

“They said, OK, you have John Smith, who has a $10 million life insurance policy as he gets older, the premiums get to the point that John Smith can’t afford to pay. … He is now 80 years old and he has stage-four lung cancer. He’s only got a six-month life expectancy and we got 12 months’ worth of premiums,” Price said.

Someone, in a viatical agreement, can purchase all or part of his policy by paying the premiums. But it’s a high-risk investment. If John Smith outlives the agreement, the investor gets stuck with the premiums and no payout when Smith dies.

“These 80-year-old people with stage-four lung cancer were living to 91 or 92. … So, they lost that investment almost to a person,” Price said.

Viaticals are fine for someone who can take the risk. But it’s “terrible” for someone who is close to retirement, said Price.

Cox and Allen were also soliciting investments for a patented hospital bed.

“They had the drawings and supposedly had a company to build them. And they supposedly had an exclusive contract with the VA [hospitals]. And yeah, that never materialized either,” Price said.

Religion ‘to mask this sort of activity’

“They didn’t stand up in church and say, ‘investments for sale,’” Price said.

But Cox and Allen had open Bibles in their offices, he said.

“I do get upset that people use religion to mask this sort of activity or to justify this sort of activity. There’s been more evil done in the name of religion historically than any other cause,” Price said.

Criminal charges have come slowly because new victims are located and new dollar figures get tallied, Price said.

“I wish they would get on with the indictment,” Price said.

Please click here to support Lubbock Lights.

Comment, react or share on our Facebook post.

Author: James Clark- James Clark is the associate editor of Lubbock Lights. He worked in radio, television and digital media for a combined total of more than 30 years. He was Director of Digital News Content at KAMC, KLBK and EverythingLubbock.com for nearly 10 years.

Facebook