Matthew Piercey, a suspect in a $35 million Ponzi scheme, thought a disgruntled investor was chasing him with his law enforcement friends Monday, that’s why he dove into the frigid Lake Shasta waters and tried to escape in an underwater submersible, his attorney told a judge Friday.
Federal Judge Carolyn Delaney was not impressed. She ruled Piercey, 44, must stay in Sacramento County Jail while he awaits trial on 31 counts of wire fraud, mail fraud, money laundering and witness tampering.
“I’m not prepared to release Mr. Piercey,” Delaney said. “It seemed to me he knew full well police were after him. Even going so far as to using a submersible device.”
After she ended the detention hearing and asked bailiffs to return Piercey to jail — the hearing was held over Zoom — the defendant addressed the judge.
“Is it customary to make a decision like that before I can speak?” Piercey asked, before his attorney alerted him that the hearing had already ended.
It was just the latest in a string of bizarre incidents involving Piercey, who was arrested Monday after a grand jury indicted him Nov. 12, alleging he bilked investors through his companies Family Wealth Legacy and Zolla. As his scam fell apart in recent months, prosecutors allege, Piercey tried to get investors to ignore subpoenas, telling some that he was working with President Trump to change the country’s banking system and the queries were just part of increased regulator scrutiny.
Piercey, who pleaded not guilty on Tuesday, could face a life sentence if convicted.
As part of their arguments to keep Piercey in custody, prosecutors entered into evidence dash cam video showing the half hour before the Lake Shasta plunge, where Piercey drove erratically through Redding, jumping curbs and leading marked CHP vehicles and undercover FBI agents through dirt paths.
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They also released still images of Piercey’s abandoned tan SUV at the edge of the lake, the shore area where they found his flip-flop and believe he entered the 57-degree water, and a grainy image of his head above water in the lake with a gentle wake behind him shortly before his arrest.
Prosecutors said Piercey pulled a Yamaha 340Li Seascooter from his SUV — it has a top speed of only 3.7 mph — and dove into the lake in his street clothes. The FBI told The Chronicle he was submerged for a few minutes. Prosecutors said agents followed his bubbles for portions of the 20 minutes he was in the lake until he was arrested.
“He said he would come out of the water if they would not put handcuffs on him,” Assistant U.S. Attorney Christopher Hales told the judge Friday.
Hales said it was just the latest difficulty agents faced with Piercey, telling the judge that in June, when agents served a search warrant at Piercey’s house he failed to cooperate multiple times and had to be taken to the ground.
Piercey lives in Palo Cedro (Shasta County) with his wife and three children. Hales said agents tried to arrest him away from his house so his children would not be there.
Piercey’s attorney argued that his client had no prior record and had been aware of the federal investigation for two years without fleeing the area. Fischer said Piercey became scared after a September incident where an investor confronted him at his home demanding his money.
Piercey attempted to record the confrontation, Fischer said, but the investor “hit his hand away three times” to get him to stop filming. The defense attorney said the investor, who had worked as a federal official, warned that he had law enforcement friends.
“Mr. Piercey was shaken by it,” Fischer said. “He was not fleeing to avoid arrest or prosecution, he was simply scared of (the former investor).
“What happened on Monday is completely out of character for Mr. Piercey,” he added.
One of Piercey’s investors, Kenneth Winton, 67, of Oroville (Butte County), has also been charged, as prosecutors allege he joined the scheme in 2018. He has been charged with conspiracy to commit wire fraud.
Piercey started the Ponzi scheme in July 2015 and continued it through this past August, according to prosecutors. He promised investors big returns, but as with all Ponzi schemes, prosecutors said, the two men used new investor money to pay old investors. Investigators believe they paid back about $8.8 million of the $35 million scheme. The rest of the money Piercey and Winton used to buy homes, a houseboat and to pay off other business and loan debts. Prosecutors allege few, if any, liquid assets remain to repay investors.
Matthias Gafni is a San Francisco Chronicle staff writer. Email: matthias.gafni@sfchronicle.com Twitter: @mgafni
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Prosecutors share photo of Ponzi suspect in Lake Shasta as he used submersible device to flee - San Francisco Chronicle
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