June 15, 2024

New reports indicate that John J. Woods, a previous Chattanooga businessman and one-time investor in the Chattanooga Lookouts, has been sentenced for his part in a ten-year Ponzi scheme.

Woods is now looking at a federal prison term of almost 8 years after scamming more than 400 investors of over $49 million.

U.S. Attorney Ryan K. Buchanan commented, “In his fiduciary role, Woods glamorized profitable returns, but instead diverted funds from new investors to deliver Ponzi profits to early investors. Woods breached the trust of his victims, many of whom were retirees, seniors or military veterans, leading to substantial losses to their life savings and retirement accounts.”

Woods’ punishment will also consist of three years of supervised release after completion of his prison term, and he has been directed to make restitution to the victims of his fraud.

A date for the hearing to determine the restitution amount has been set for April 15, 2024.

It’s worth noting that Woods, once a Chattanoogan, is currently the executive director of an investment banking firm in Atlanta and was speculated to take ownership of the Chattanooga Lookouts.

EARLIER REPORT: John J. Woods, then-President of Southport Capital and manager of Horizon Private Equity, pleaded guilty to a Ponzi scheme, defrauding his investors of more than $25 million.

Keri Farley, Special Agent in Charge of FBI Atlanta, hoped that Woods’ guilty plea would bring some relief to the victims of his greed-fueled actions, highlighting the need for investors to do their research before deciding who to trust with their finances.

According to U.S. Attorney Buchanan, Woods ran a Ponzi scheme until it was dismantled by the U.S. Securities and Exchange Commission in 2021. He lured investors to a fund named, “Horizon Private Equity,” and promised returns ranging from six to seven percent. However, contrary to these assertions, the funds from new investors were mainly utilized for paying returns to earlier investors. The statements Woods issued regarding the investments were misleading, revealing none of the essentials about the funds. By July 2021, Horizon investors were owed over $110,000,000, and the victims’ losses due to Woods’s fraudulent activities have exceeded $25 million.

ANOTHER REPORT: John J Woods, the previous Chattanooga businessman, was accused of a single count of wire fraud linked to an alleged Ponzi scheme, wherein federal regulators blamed him of deceiving investors.

Court documents show that Woods is alleged by the U.S. Attorney’s Office in the Northern District of Georgia to have duped a victim into wiring over $251,000 on false representations. If found guilty, Woods may face up to 20 years imprisonment.

In an earlier scenario, the U.S. Securities and Exchange Commission had accused Woods of leading a Ponzi scheme for over ten years, accruing over $110 million from more than 400 investors, resulting in a $25 loss of the investors’ money.

Woods pleaded not guilty and was released on a $25,000 bond. Judgments totaling $65 million were entered against Southport Capital and Horizon in the commission’s case.

You can find additional details from our news partners at The Chattanooga Times Free Press [here](https://www.timesfreepress.com/news/2023/mar/15/chattanooga-john-woods-charged-felony-alleged-ponzi-scheme/).

Frequently Asked Questions

What is a Ponzi scheme?

A Ponzi scheme is a fraudulent investment strategy where returns promised to early investors are paid from funds contributed by new investors. The scheme collapses when it becomes impossible to attract new investors or when a significant number of current investors demand to cash out.

What are the consequences of running a Ponzi scheme?

The penalties for running a Ponzi scheme are severe and include lengthy prison sentences, substantial fines, and restitution orders to pay back defrauded investors. This was the case with John J Woods, who was sentenced to nearly 8 years in federal prison, ordered to make restitution to his victims, and will have three years of supervised release upon completing his prison sentence.

How can investors protect themselves from Ponzi schemes?

Investors can protect themselves by carefully researching before deciding to invest. They should be wary of investment opportunities offering unusually high returns with little or no risk. It is also advisable to ask for written information about the investment, including a prospectus, annual report, or financial statements. An absence of these documents is a red flag for potential fraud.