Carl Channing Spence, a 40-year-old resident of Mont Belvieu, pleaded guilty Thursday in federal court to operating what prosecutors describe as a $2.1 million Ponzi-style investment scheme that relied on personal relationships. Authorities say he promised consistent, high returns while falsifying account statements and directing investor funds into an account under his sole control. Spence is scheduled for sentencing on April 14 and faces up to 20 years in federal prison.
Spence acknowledged that he fraudulently raised over $2.1 million from investors between January 2022 and August 2023 through a home-based operation called AEI Financial. According to court filings, he used funds from new investors to pay returns to earlier investors and cover personal expenses, rather than investing the money as promised.
A federal grand jury indicted Spence in September 2023, the U.S. Attorney’s Office for the Southern District of Texas said. The FBI led the investigation, and Assistant U.S. Attorneys Thomas Carter and Brad Gray are handling the prosecution.
How the pitch worked
Prosecutors say Spence promoted AEI Financial by capitalizing on the popularity of viral meme stock trading, presenting his strategy as a way to generate quick, consistent gains. He allegedly promised returns of 10 to 12 percent and provided fabricated account statements showing profits that never existed.
Investopedia defines meme-stock trading as social-media-driven buying that can cause extreme price swings, generating both hype and risk. The SEC has long cautioned that promises of guaranteed or unusually steady returns are common warning signs of a Ponzi-style scheme.
Legal next steps
Spence pleaded guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison, along with potential fines and restitution, the U.S. Attorney’s Office said. He is scheduled for sentencing on April 14, when a federal judge will also consider restitution and other financial penalties related to the case.
Advice for would-be investors
Investor advises verifying that an advisor is properly registered, insisting on clear written documentation, being skeptical of promises of guaranteed or unusually consistent returns, and reporting suspected fraud to regulators.
