The former chairman of a Hallandale-Beach-based commercial lending business has been sentenced to five years in federal prison for orchestrating a securities fraud conspiracy scheme that raised over $280 million, using millions for his personal expenses and to fund a high-end lifestyle.
Carl R. Ruderman, 82, of Aventura, was being held in the Federal Detention Center in Miami as of Thursday. He entered a plea agreement in October and was sentenced Wednesday to the maximum five-year term for conspiracy to commit securities fraud.
Ruderman served from 2013 to at least July 2018 as the chairman of 1 Global Capital, a business that received money from investors and lent short-term, merchant cash advance loans, or MCA loans, to small businesses.
He and his co-defendants sought investors’ funds by falsely promising that 1 Global Capital’s investment returns would be in the double digits, according to a factual proffer, the facts agreed on by the defendant and prosecution. Ruderman and those working for him made “portfolio statements” that inflated the company’s past investment returns and misrepresented the status of certain loans to make it seem they were performing better than they actually were.
Investors were also told that 1 Global Capital’s financial statements were audited by at least two certified public accounting firms, which in actuality never happened, according to the factual proffer. Ruderman diverted millions from investors for personal expenses, including traveling for vacations, insurance payments for art and jewelry, personal staff, credit card payments, his mortgage, tuition and a luxury car for his wife.
“Overtime, the difference between the amount of money 1 Global raised from investors and the amount of money 1 Global actually loaned out via MCAs grew to tens of millions of dollars,” the factual proffer said.
Ruderman received at least $4 million of investors’ money in a trust in his family’s name, $200,000 to his accounts and $5.6 million to an account called “Pay Now Direct” that the factual proffer said he often funneled money through.
Investors, advisers and regulators questioned whether 1 Global’s investment offering was a security per the U.S. Securities and Exchange Commission and subject to federal securities law and registration requirements.
He instructed attorney Jan Atlas to write two opinion letters in 2016 that said it was not a security, despite having received legal advise that it, in fact, was, the factual proffer said. Another attorney Andrew Ledbetter was involved with that plan.
Atlas, 79, and Ledbetter, 81, both previously pleaded guilty to conspiracy to commit wire fraud and securities fraud, federal prosecutors said.
Atlas was sentenced to eight months in prison and was released in June 2023. Ledbetter was sentenced to five years and was ordered to pay over $148 million to the victims. He will be released in October, Federal Bureau of Prisons records say.
Two other co-defendants previously pleaded guilty: Alan G. Heide, 65, former 1 Global CFO; and Steven Allen Schwartz, 79, former COO.
Heide pleaded guilty to conspiracy to commit securities fraud and was sentenced to five years, according to prosecutors. He was released from prison in December 2023, prison records show.
Schwartz pleaded guilty to conspiracy to commit wire fraud and securities fraud and was sentenced to 10 months. He was ordered to surrender for his sentence in June 2024, according to court records.
1 Global filed for bankruptcy in 2018 and the SEC previously filed civil fraud actions against the company.