A Charlotte man, Frank Lynold Mercado, age 26, entered a guilty plea to charges of wire fraud related to an investment fraud scheme causing losses of over $700,000 to more than 100 victims. This announcement came from U.S. Attorney Dena J. King, for the Western District of North Carolina, according to a press release from the U.S. Attorney's Office.
Details from plea documents and court proceedings suggest that from July 2019 to December 2022, Mercado engaged in deceitful activities by posing as an options trading expert and luring friends, former co-workers, and other social contacts into investing with his hedge fund, Tiger-Wolf Capital, LLC. These investments, which were promised to be used for options trading, were instead diverted to Mercado’s personal use, funding a lifestyle adorned with lush Airbnb stays, restaurants, and bar tabs. Robert M. DeWitt, Special Agent in Charge of the FBI’s Charlotte Division, joined U.S. Attorney King in the public disclosure of Mercado's plea.
Fraudulent interventions by Mercado involved not only the misuse of funds but also fabrications about investment performance to his investors. Victims received artificial updates through emails and messages suggesting fictitious trading success. As court documents revealed, some of the money was indeed placed into trading; however, the results were losses, which Mercado chose to hide behind a facade of falsified gains. "He also made false and fraudulent statements to investors about substantial returns on their investments," the plea agreement detailed to induce more investments or to maintain existing ones.
Following his guilty plea, Mercado was released on bond while the wire fraud charge he faces carries a potential prison sentence that could span to 20 years. While an exact date for his sentencing has yet to be declared, the U.S. Attorney's Office has commended the FBI for their delicate work on the investigation and has acknowledged the collaboration with the U.S. Securities and Exchange Commission, which recently filed a separate complaint against Mercado and his firm for securities violations.
