Judge denies motion to refer to Money Tree as “Ponzi Scheme”

Published 9:46 pm Friday, October 21, 2016


The federal trial of Post-Confirmation Committee for Small Loans, Inc., against Derek Martin and his various companies and entities, including Money Tree, began Wednesday, Oct. 5, and has continued through to Friday, with plans to convene again Monday.

On Thursday, Oct. 13, Judge W. Louis Sands issued an order that disallowed the reference to Money Tree or any other of the entities related to it as a Ponzi scheme.

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According to law precedents, a Ponzie scheme “usually conducts little to no legitimate business operations,” according to Sands’ order. Sands wrote that while there is record evidence that some of The Money Tree storefronts were unsuccessful, there is also evidence that others were successful and legitimate operation business entities.

“While there is sufficient evidence, if believed by the jury, to establish some of the Committee’s claims of fraudulent transfers, the Court is not satisfied that these same facts are sufficient to establish the existence of a Ponzi scheme either at The Money Tree, Inc.’s inception or at some later point in its corporate life,” Sands’ order reads.

For the remainder of trial, all mention or reference to Money Tree as a Ponzi scheme is prohibited by counsel, parties and witnesses in the presence of the jury.

Testimonials from Mary Warren, Gregory Hays, Brad Bellville, Deborah Inlow, Steven Morrison, James Hart, Jennifer Ard, Jeff Martin, William Derek Martin, Michael L. Hunter, Grace Elizabeth Martin Johnston, Jason Tharpe, Shana Shockley Martin, William David Bragg, James Patrick Johnston, Chris Edwards, Gina Lyons, Jefferey “Jeff” Martin, and Byron Clifford “Cliff” Owens have been made over the past two weeks.

Court will reconvene Monday morning at the U.S. District Courthouse in Albany.

Attorneys for the plaintiffs, the Committee, are John Elrod, Michael Moody and John Londot. Attorneys for the defendants are John McGoldrick, Rice Ferrelle, Graham McDonald and Christopher Gunnells.