Detroit Investment Fund Owner Andrew H. Middlebrooks Sentenced to 100 Months in Prison In $39 Million Wire Fraud Scheme

A federal judge in Detroit has sentenced Detroit Investment Fund Owner Andrew H. Middlebrooks to 100 months in federal prison. Middlebrooks was the former CEO and portfolio manager of EIA All Weather Alpha Fund 1 Partners (EIA). He pleaded guilty to charges of Wire Fraud for creating a scam over $39 million from investors. Middlebrooks solicited clients for EIA by telling them he was able to exploit “inefficiencies” in global equity markets. These inefficiencies would result in large returns for investors.  But the EIA’s fund failed to produce the predicted returns and suffered catastrophic losses.

The Detroit investment fund owner did not inform EIA’s existing investors that the fund was failing. Instead, he solicited new investors with false statements about the fund’s performance. He lulled existing investors by lying to them about the returns their investments generated. In other words, he created a Ponzi scheme. 

Middlebrooks also created and distributed fake documents showing EIA’s performance was exceptional. In one document from 2019, Middlebrooks falsely claimed that EIA’s track record included a cumulative return of 476.81% with 81.82% of monthly trading showing a profit. Eventually, Middlebrooks’ scheme collapsed. This resulted in losses to 97 investors exceeding $34 million.

Acting Special Agent in Charge of the FBI Detroit Field Office Reuben Coleman told the media:

“The sentencing of Andrew Middlebrooks underscores the significance of white-collar crimes and the lasting harm they impose on hard-working Americans. White-collar crimes threaten the integrity of our financial systems and undermine the trust and security of communities. The FBI in Michigan will continue to investigate those who violate federal laws and ensure they are held accountable. I want to thank the dedicated members from our FBI Detroit Field Office and our partners at the U.S. Attorney’s Office for the Eastern District of Michigan for their tireless work in bringing this case to justice.”

Middlebrook’s attorney, R. Michael Bullotta said in an email to Detroit News claims his client was legitimately trying to do the right thing.

“The mistake Andrew and others working with him made was that, when some of the investments began to lose money, instead of admitting that fact, Andrew tried to right the ship with riskier investments that did not pan out, resulting in substantial losses to the fund,” the attorney said. “His crime was in concealing those losses in order to buy himself and his partners more time to make his fund profitable.”

Read More About White Collar Criminals On MFI-Miami.com.