A Texas man has admitted to orchestrating a $2.1 million investment fraud that promised big returns on meme stocks but instead funded personal expenses.
Carl Channing Spence, 40, of Mont Belvieu, about 30 miles east of Houston, pleaded guilty to wire fraud charges that could land him 20 years in federal prison.
The scheme operated from Spence’s home via his company, AEI Financial, between January 2022 and August 2023.
He targeted friends, acquaintances, and colleagues with promises of 10%-12% returns from trading popular meme stocks.
Instead of investing as promised, prosecutors say Spence diverted funds for personal use. He paid earlier investors with new victims’ money to maintain the illusion of success.
Spence created fake account statements showing investment growth. These fraudulent documents convinced victims to reinvest more money.
In reality, Spence pooled investor funds into a single account. He lost much of it through unsuccessful trades, according to the U.S. Attorney’s Office in the Southern District of Texas.
The FBI investigated the case after victims discovered they couldn’t recover their investments or promised returns.
Investigators determined Spence obtained approximately $2.1 million from known victims.
U.S. District Judge Lee H. Rosenthal will sentence Spence on April 14. He faces up to 20 years in federal prison and a possible $250,000 fine.
Assistant U.S. Attorneys Thomas Carter and Brad Gray are prosecuting the case.
