A federal jury in San Antonio convicted two Lubbock businessmen on all four counts they faced in a multimillion-dollar Ponzi scheme, and both men were taken into federal custody the moment the verdict was read. Joshua Allen and Michael Cox jointly owned and controlled four investment companies, Ferrum Capital LLC and three related entities, that prosecutors say used new investor money to pay off earlier investors while the two men personally benefited. The case matters to retirement savers because the victims were ordinary investors, some drawn in through personal and religious connections, who believed they had put their money somewhere safe, and the size of the loss shows how far a Ponzi structure can run before regulators or a jury catch up with it.
Guilty on Wire Fraud, Money Laundering and Securities Fraud
The jury, concluding a weeklong trial before U.S. District Judge Fred Biery, convicted Allen and Cox of conspiracy to commit wire fraud, conspiracy to commit money laundering, conspiracy to launder monetary instruments, and securities fraud, according to the Justice Department’s account of the verdict. Prosecutors said Allen, Cox, and others acting at their direction solicited victims to invest in the Ferrum entities while concealing the true security of the investments and the high commissions the men were collecting. Hundreds of victims collectively lost millions of dollars, and much of that money went toward paying earlier investors to keep the operation running and attract new victims, the defining structure of a Ponzi scheme, while a portion directly benefited Allen and Cox themselves.
Local reporting on the trial put a more specific number on the scale of the fraud: prosecutors described an estimated $60 million raised from roughly 500 investors. Witnesses at trial testified that signatures on investment contracts were forged, including one contract worth as much as $258,000 that a witness said he never signed, and a second instance in which an investor said Allen filled out a check on her behalf and left the payee line blank, only for the money to end up with Ferrum Capital instead of the business she had agreed to invest in.
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Custody, Not Bail, Following the Verdict
Both men now face up to 70 years in prison on the four counts combined. Judge Biery found Allen and Cox to be flight risks and ordered them held without bail immediately after the verdict, meaning neither is free while sentencing is pending. Their sentencing hearings had not been scheduled as of the Justice Department’s own announcement of the verdict, so no date for either man’s actual punishment has been set.
“In the midst of this Ponzi scheme, Allen and Cox collected a handsome fee by telling various egregious lies, even using their self-proclaimed faith and reputation in their community to con the investors they victimized,” said U.S. Attorney Justin R. Simmons for the Western District of Texas. IRS Criminal Investigation Special Agent in Charge Christopher J. Altemus Jr. said the case took years to unravel, tracing money and interviewing witnesses to identify more victims of what he called “this despicable Ponzi scheme.” FBI Special Agent in Charge Daniel Faith of the San Antonio Field Office added that the convictions “send an important message” to anyone who abuses the trust of others for personal gain.
A Third Defendant Already Convicted
Allen and Cox were tried alongside a case already resolved against a third participant in the same scheme. Brooklynn Chandler Willy of San Antonio, who owned Chandler Capital Holdings and did business as Texas Financial Advisory, pleaded guilty to ten counts in March tied to the Ferrum Capital fraud and is scheduled for a separate sentencing hearing in December. The Justice Department’s own announcement of the Allen and Cox verdict describes her as an “already convicted co-defendant,” meaning the underlying investment fraud has now produced findings of guilt against all three people who were charged.
The Ferrum Capital case was investigated by IRS Criminal Investigation and the FBI, and prosecuted by Assistant U.S. Attorneys Joe Blackwell and Sam Shapiro. Because Allen and Cox were convicted at trial rather than through a plea agreement, their eventual sentences will be determined by Judge Biery based on federal sentencing guidelines and the trial record, up to the 70-year statutory maximum on the four counts combined.
The criminal case followed a federal indictment handed up in July 2025 that first accused Allen and Cox of misleading investors, concealing high commissions, and lying about the nature of the investments sold through the Ferrum entities. Separate civil lawsuits have also been filed against the two men by investors seeking to recover what they put into the funds, litigation that runs alongside the criminal case and is not resolved by Tuesday’s verdict. A civil judgment, unlike a criminal restitution order, would not depend on Allen and Cox actually having assets left to collect, though victims in cases like this one often recover only a fraction of what they invested regardless of which court rules in their favor.
This article was produced with AI assistance and reviewed by The Financial Wire editorial team.
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Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
