FORT MYERS — Thirteen months after convicted hedge fund swindler David Mobley Sr. was released from federal prison, he's facing a possible return for not paying a dime of his $77.3 million restitution to investors.
The 56-year-old Naples man was arrested last month on charges he violated terms of his three-year supervised release, which require him to pay back hundreds of investors he duped through his Maricopa International Investment offices in North Naples.
He is scheduled to be in court today for a final revocation hearing before U.S. District Judge John Steele, who sentenced him in October 2001 on eight counts of fraud, money laundering and tax evasion; 12 charges were dropped as part of a plea deal.
In all, 360 investors nationwide lost about $140 million.
"He should still be in prison," said Bill Marvin, 63, of Bonita Springs, who spoke at Mobley's 2001 sentencing. "He wasn't Bernie Madoff by any stretch of the imagination, but he was pretty close. He hurt hundreds of people.
"I think the court system and what they did to him was ridiculous when you think that people killed themselves and that he destroyed a lot of lives," Marvin said, contending Mobley should have served his original 17½-year sentence.
Like others, Marvin encouraged his family to invest. His father lost his life savings and his 93-year-old grandmother, sister and brother-in-law lost money. He declined to specify how much, but didn't give Mobley "millions" until he'd done well on his initial $100,000 investment.
Marvin owned a Naples home, but now rents in Bonita Springs, he said, adding: "I would be wealthy by now."
Mobley received several sentencing breaks due to a mistake by his attorney and his cooperation with state prosecutors in the Stadium Naples public corruption probe, which ended in the arrests of Mobley, three former county commissioners, the former county manager and five others on racketeering and influence-peddling charges.
Mobley's new federal public defender, George Ellis Summers Jr., declined to comment about Monday's hearing. William Daniels, a spokesman for the U.S. Attorney's Office, said the violation was filed because Mobley hasn't paid any restitution.
Mobley couldn't be reached, despite repeated attempts, about what he's been doing since his release on Aug. 15, 2011. But his Facebook account shows he joined three months later, often talking about music and Christian books that helped him in prison.
A former Jeep factory worker with no college education, Mobley passed himself off as a sophisticated hedge-fund manager, but funneled investors' money into his own lavish lifestyle, charities and failed business ventures, including Stadium Naples. He bought expensive houses in Quail West, Vail, Colo., and in Autumn Woods in Naples, for his daughter. He purchased furnishings, a Jaguar, Porsche, Mercedes-Benz, BMW, a $40,000 diamond ring and more.
Investors say it wasn't the usual Ponzi scheme that sets off red flags due to huge returns. Instead, he promised conservative, consistent growth. For five years, he provided investors with bogus, inflated account statements. Hedge funds, which are largely unregulated, are typically restricted to wealthy investors who pool money to trade and "hedge" investments on the markets' ups and downs.
At one point, he claimed to be managing $450 million in funds, but investigators said it was $35 million.
"What he would do is make an investment, lose a lot and not trade," said Naples attorney Chris Vernon, who along with attorney Susan Healy, now his law partner, was among lawyers who represented investors. "He was taking money, paying himself and living the high life. When investors wanted out, he would give them money from other people."
Just before his scheme collapsed, Mobley gave himself a $2 million bonus and $1.9 million to First Assembly of God's planned homeless shelter in Collier County.
In February 2000, after Barron's financial magazine printed a front-page exposé, IRS and FBI agents raided his office and seized records and assets, prompting his confession to Securities and Exchange Commission regulators.
That October, a federal grand jury indicted him and soon after, state prosecutors charged him, leading to a five-year prison term four years later.
Meanwhile, investors and a receiver filed lawsuits. The receiver targeted law firms and investment houses, alleging malpractice, and investors who got more than they put in. First Assembly of God was among charities and schools forced to return donations. Victims received only a fraction of their investments.
Brett Franklin, 46, of Naples, was "young and just trying to make money" in 1995.
"A lot of people overstretched," Franklin said of others spending what they thought they made. "It all blew up in 2000. It affected a lot of people's lives."
His mother, 71-year-old Sharon E. Smith of Naples, invested about $2.8 million and got $978,000 back, but a $250,000 check she got a day before the raid bounced. She and others went through arbitration, got nothing and lost more — paying attorney Thomas Grady $22,000 in fees.
"I should have been able to get some money back," Smith said. "I just couldn't believe it."
She survived because she sold a house before the economy soured, but said it was a terrible experience that affected her financially, emotionally and broke up her relationship. She's uncertain she wants to watch his hearing.
"It brings back such memories, the stress and heartache," she said. "It seems that none of the criminals get what they deserve."