Executive With Previous Affiliation to Playgirl Magazine Admits to $250 Million Fraud Scheme in Lending Business

24

An executive from Florida, Carl R. Ruderman, who was once associated with a family business that owned Playgirl magazine, has entered a guilty plea for engaging in a conspiracy to commit securities fraud. The charges relate to deceiving investors in another enterprise he was involved with—1 Global Capital LLC, a company specializing in high-interest loans to small-scale businesses.

Ruderman, 82, served as the Chairman and CEO of 1 Global Capital LLC, which declared bankruptcy in July 2018. According to federal officials, he participated in a fraudulent operation that defrauded more than 3,400 investors across 42 states out of $250 million.

The plea was entered in a federal court in Miami, and sentencing has been scheduled for January 3. Ruderman could face a maximum of five years in prison, along with the forfeiture of funds exceeding $250 million.

The Justice Department revealed in a subsequent news release that Ruderman confessed to misusing 1 Global investors’ funds for various personal expenses. These included credit card bills, vacations, employment of drivers and nannies, domestic help, educational tuition, mortgage and luxury car payments, as well as insurance premiums for his art and jewelry collections.

Moreover, Ruderman admitted to the unauthorized channeling of investor funds to enterprises that financially benefitted him and his family. 1 Global Capital LLC, headquartered in Hallandale Beach, Florida, extended what are known as merchant cash advance loans to small businesses—a loan type that prosecutors likened to payday loans.

Federal authorities stated that Ruderman and his associates provided false information to both current and prospective investors regarding 1 Global’s financial health. Investors were misled into believing that the company had undergone audits by a certified public accounting firm. They were also given false assurances that their investments would be used specifically for advancing loans to merchants and that they could anticipate high returns on their investments.

The Securities and Exchange Commission (SEC), in its 2018 complaint against Ruderman and 1 Global, disclosed that the firm had solicited funds from investors—some of whom utilized their retirement savings—between February 2014 and July 2018. The SEC also reported that 1 Global was originally formed in 2013 and was owned by the Ruderman Family Trust, which also owned several other businesses, including Digi South. Digi South was revealed to have once owned Playgirl among other adult publications and had received approximately $805,000 from 1 Global without providing any legitimate services or consideration in return.

Four other individuals associated with Ruderman have previously pleaded guilty for their roles in the fraudulent activities of 1 Global. Alan G. Heide, the company’s former CFO, pleaded guilty in 2019 to conspiracy to commit securities fraud and was sentenced to five years in prison, along with an order to pay over $57 million in restitution. Andrew Dale Ledbetter, Steven Allen Schwartz, and Jan Douglas Atlas, all of Florida, similarly entered guilty pleas for conspiracy to commit wire fraud and securities fraud. They were sentenced to prison and ordered to pay restitution ranging from $29 million to $148 million.

Frequently Asked Questions (FAQs) about Securities Fraud

More about Securities Fraud

• Justice Department Press Release on Ruderman Guilty Plea
• SEC Complaint Against Carl R. Ruderman and 1 Global Capital
• 1 Global Capital LLC Bankruptcy Filing Details
• Background on Merchant Cash Advance Loans
• Understanding Securities Fraud