A former NASCAR driver is at the center of a $15 million fraud investigation and is accused of creating a fake coal mining company to get money from investors.
WSOC-TV reported that federal agents launched a massive investigation into Brian Rose after an alleged victim from Charlotte came forward.
Authorities said he’s one of more than 160 investors bilked into handing over thousands of dollars.
The nine defendants from five states created a phony coal mining company, according to the 49-page indictment.
The Secret Service said the accused tried to cover every detail to convince investors it was the real deal.
In the indictment, federal prosecutors named Rose as the ringleader of this elaborate coal-mining scheme.
The defendants would call investors saying New Century Coal was looking to mine low sulfur and low ash coal in Kentucky and Tennessee, according to the documents.
They promised a quarterly return of 6 percent until operations began.
After that, investors would receive 100 percent or more during the first year of mining.
WSOC-TV learned the Secret Service found out about this scheme in 2013.
Secret Service Agent Glen Kessler told WSOC, “We determined, yes, in fact this was too good to be true — that these companies that had operations in Louisville, Kentucky and Johnson City, Tennessee, were fraudulent.”
The indictment stated the nine defendants were very careful to cover their tracks.
Two of them legally changed their names and attached those names to New Century Coal.
The defendants also created ghost companies to ease investors’ suspicions.
Prosecutors said when investors asked questions about their money, the defendants brought up a more lucrative investment and persuaded them to switch their investments into a ghost company.
Meanwhile, prosecutors said investors had no idea what their money was really being spent on.
“Brian Rose would use investors’ money to actually support his own NASCAR racing team,” Kessler said.
Prosecutors said the defendants also spent part of the $15 million on “lavish gambling trips to Las Vegas” and buying and training thoroughbred horses.
All nine defendants are now charged with conspiracy to commit wire and mail fraud.
The Secret Service already seized a number of race cars, race horses and property from Rose and the other defendants.
Agents are still working on tracking down all of their assets.
Rose’s attorney had no comment this afternoon.
WSOC learned Rose’s father was sentenced to four years in prison for bilking $15 million out of investors for fraudulent oil and gas companies.
The Secret Service said they are currently investigating another company called Earth Energy Exploration that was run by Rose and his family.