Los Angeles, California - The former president and CEO of the Sherman Oaks-based Morgan Peabody, Inc. brokerage and investment firm was sentenced Monday to 15 years in prison for federal wire fraud charges stemming from an investment scam in which defendant misappropriated nearly $6 million from more than 100 investors.

David Williams, 54, of Studio City, a licensed securities dealer and investment adviser, was sentenced by United States District Judge Dale S. Fischer. In May 2015, in the midst of a jury trial, Williams pleaded guilty to three counts of wire fraud and two counts of tax evasion. As part of his plea agreement, Williams admitted that he directed Morgan Peabody representatives to sell securities in a fund that Williams personally had created, purportedly to invest in real estate. The Sherwood Secured Investment Fund, LLC, a Studio City business that Williams owned, offered a 9 percent annual return on investments. Williams used the majority of the $3.75 million investors put in the Sherwood Fund to pay for personal expenses, including lavish vacations and a $50,000/month lease on a $6 million residence in Toluca Lake.

The defendant was also held responsible for misappropriated funds from two other securities offerings that he created, for a total of almost $6 million in investor funds that he bilked from the three offerings. Williams was also found to have obstructed justice by lying to the Securities & Exchange Commission in its investigation of the offerings, and lying to the Judge and the Probation Office in seeking to withdraw his guilty plea.

"This sentence serves as a warning to criminals who commit fraud that they face very serious consequences," said United States Attorney Eileen M. Decker. "The defendant callously stole the hard-earned retirement savings of numerous victims and spent it on himself. His greed and lack of remorse will continue to harm his victims for many years to come, but now he too will be paying a price for more than a decade."

"While the defendant's sentence is significant, it will not compensate for the monetary investments lost to the dozens of people he victimized through false representations," said Deirdre Fike, the Assistant Director in Charge of the FBI's Field Office. "The FBI will continue to collaborate with our partners at the IRS and the United States Attorney's Office to address significant investment fraud matters."

In his plea agreement, Williams admitted that he used investor money for personal purposes and committed tax evasion by failing to file returns with the IRS for tax years 2007 and 2008, and failing to report the more than $2.3 million in income he received. Williams agreed in the plea agreement to pay additional taxes of $777,881 for those tax years. Defendant subsequently moved to withdraw his plea, but the Court denied his motion and ordered him to pay restitution in the amount of $5,125,137.60 to victims of the fraud scheme, $777,881 to the IRS, and $258,940 to the California Franchise Tax Board.

"Mr. Williams squandered the life savings of his investors, putting his own selfish greed above the wellbeing of his victims," stated Acting Special Agent in Charge Anthony J. Orlando of IRS Criminal Investigation. "As yesterday’s sentencing demonstrates, fraudsters like Mr. Williams will be held accountable for their actions as they are unacceptable to both investors and the taxpaying public."

The investigation into Williams’ scheme was conducted by special agents with the Federal Bureau of Investigation and IRS - Criminal Investigation. The case was prosecuted by Assistant United States Attorney Keri Axel.