June 15, 2024

The V.I. District Court has seen a new complaint filed against Matthew McClafferty, the proprietor of Mac Private Equity Inc., a private equity firm. This follows a similar lawsuit previously covered by the Consortium. Accused of orchestrating a Ponzi scheme, the latest legal move – launched by a father-daughter tandem – further tangles up the beleaguered businessman’s litigation situation. McClafferty persistently refutes all accusations, alleging his accusers of attempted blackmail.

Earlier this month, Consortium reporters brought to light a lawsuit lodged in district court against McClafferty and his private equity company. It was alleged that he did not pay back money that had been lent to the firm after he had enticed financiers with assurances of impressive interest yields on their starting contributions. 

McClafferty rebuffed the allegations brought forward by the plaintiff, Alex Gibson, insinuating him of possibly participating in dubious financial transactions. In a discussion with the Consortium, Mr. McClafferty contended that the problem was simply a contractual disagreement, characterizing the legal filing as a form of coercion. “It’s clear-cut extortion” he stated forcefully.

McClafferty also disputed Gibson’s portrayal of his enterprise as a “Ponzi scheme,” maintaining that the finances his company amasses are in the form of loans, not investment. He explained to the Consortium that Gibson’s lawsuit was rooted in a “private lender-borrower matter,” insisting, “That does not constitute a security.”

Yet, the subsequently lodged lawsuit paints McClafferty as operating an elaborate Ponzi scheme, attaching the Wikipedia definition of the term in the footnotes of the complaint. According to Wikipedia, a Ponzi scheme is a type of fraud that lures unsuspecting investors and pays profits to earlier investors with funds obtained from latter investors.”

The new lawsuit was initiated by Glenn and Victoria Blandford, a father-daughter pair who reportedly first encountered Mr. Clafferty when Victoria was posted at the Coast Guard Marine Safety Detachment in Charlotte Amalie, St. Thomas. Their allegations closely mirror those made by Mr. Gibson. Roughly seven months after he first inked an agreement with McClafferty, Victoria Blandford started collaborating with the private equity businessman. She made an initial investment of $25,000, signing a promissory note on March 15, 2023 that offered a flat interest rate of 25.5%, computed upfront.

This agreement implied that Ms. Blandford was anticipating a return of just over $31,000, payable 90 days after the original funds were transferred, as well as a profit-share remuneration of 15% of her initial investment. Similar to the agreements between McClafferty and Gibson, the promissory note encompassed penalties for late payment and a clause that allowed Mr. McClafferty to autonomously roll over the funding.

On April 5, 2023, prior to the maturity of her first payment, Victoria invested an additional $30,000 with McClafferty, part of which was contributed by her father, Glenn. The second promissory note suggested that the interest rate would be even more substantial this time around – pegged at 36.25%, along with the 15% profit-share. According to the lawsuit, the second note also promised that all of Mr. McClafferty’s “assets, corporate shares, stocks and bonds” would act as collateral for the $30,000 the Blandfords had invested.

The Blandfords allege that like in Mr. Gibson’s case, after the two promissory notes became due on December 10 and 31, 2023, McClafferty began a series of actions to evade paying the amounts due.

The lawsuit maintains that a check was purposely mailed “to an incorrect and incomplete address,” succeeded by a command to stop payment on the check. The complaint – presented by Michael Sheesley, the same attorney hired by Mr. Gibson – also alleges that Victoria Blandford was intimidated by McClafferty, who allegedly warned her of potential dismissal from the Coast Guard due to her financial engagements. 

The Blandfords contend, as Mr. Gibson had earlier, that McClafferty’s organizations, namely, Mac Private Equity and MPE Clearing & Holdings Inc., are shell corporations whose sole purpose is to funnel finances to McClafferty as their principal stakeholder. The court is being petitioned to pierce the corporate veil in this case too, and award damages for breach of agreement, breach of contract, and fraudulent misrepresentation, among other transgressions.

In the meantime, Mr. Gibson has altered his complaint to include a defamation charge, backed by the allegations Mr. McClafferty made while countering the lawsuit. Some of the claims made against Mr. Gibson are irrefutably false, as substantiated by text messages introduced as exhibits in the legal filings. Owing to Mr. McClafferty’s claimed defamation, Mr. Gibson now seeks punitive damages for causing emotional distress. 

When approached for a comment, McClafferty again categorised the lawsuits as nothing more than calculated blackmail attempts by a lawyer hoping for a hefty paycheck. “My guess is Attorney Sheesley will convince a handful of disgruntled lenders to surface with the promise of lucrative settlements while dismissing the hundreds of satisfied lenders we’ve worked with, both institutional and personal, who’ve raked in hundreds of thousands of dollars, if not millions, from our successful funding deals,” McClafferty said. He contended that the lawyer was presented with offers of full remuneration for all lenders he represented, which were brushed aside in favour of an excessive demand, implying that such behavior made Mr. Sheesley resemble a profiteering lawyer.

McClafferty showed Consortium a document he claimed was forwarded to Ms. Blandford on the same day her lawsuit was filed. The document, titled “Waiver and Release,” proposes to pay her $76,750. This sum is reportedly outstanding following her two payments to Mac Private Equity. In return, Ms. Blandford would be required to refrain from disparaging Mr. McClafferty or his firms and absolve them of any future liability. McClafferty disclosed to the Consortium that he had already paid an initial sum of $30,000 to her father, Glenn Blandford, as per her directives.