HAMILTON, N.Y. (AP) — For many years, Miles “Burt” Marshall was the person to consult in a part of upstate New York if you had funds to invest and preferred to keep it within the community.
Based in an office located in the picturesque village of Hamilton, near Colgate University, Marshall handled tax preparation and sold insurance. He also collected funds for what was occasionally referred to as the “8% Fund,” which ensured a consistent 8% return each year regardless of market conditions.
His customers shared the news with their relatives and acquaintances. Possessing a retirement savings fund? Allow Burt to manage it. He will put it into nearby rental properties, and your funds will increase more rapidly than in a traditional bank.
Marshall was warm and down-to-earth. He handed out gift bags containing maple syrup, pickles, and local honey, each in jars marked with charming phrases such as, “Don’t be a sap. For proper insurance coverage call Miles B. Marshall.”
He would explain that many others invest, including churches, fire departments, and doctors,” said a client, Christine Corrigan. “So you might think, ‘They’re intelligent people; they wouldn’t be involved if it wasn’t acceptable… Why should you be the one to doubt it?
Then everything fell apart.
Marshall had debts totaling approximately $95 million in principal and interest to nearly 1,000 individuals and entities when he sought bankruptcy protection two years ago, as stated in the trustee’s documents.
This summer, the 73-year-old entrepreneur was charged with allegations that his investment company operated as a Ponzi scheme. If found guilty, he may be sentenced to jail.
Marshall’s legal team chose not to provide a statement.
The total losses experienced by Marshall’s investors are less than the multibillion-dollar Ponzi scheme orchestrated byBernie Madoff. However, they have a significant presence in the small college town with approximately 6,400 residents and its predominantly rural vicinity.
Numerous investors included Colgate faculty members, workers, office staff, and senior citizens. Several individuals lost their lifetime savings, amounting to tens or even hundreds of thousands of dollars. Corrigan and her spouse, who operate a restaurant located 30 miles (48 kilometers) to the east, were owed approximately $1.5 million.
Now they’re questioning how someone who appeared so dependable, who hosted yearly events for his clients and even called them on their birthdays could break their confidence.
Life looks different after something like this. It’s as if you’re asking, ‘Who can you trust?'” said Dennis Sullivan, who was owed approximately $40,000. “It’s unfortunate because of the impact he’s had on the community.
A reliable local businessman
Marshall and his wife resided in a brick Victorian house, located just a few blocks from his workplace. In addition to offering insurance and tax preparation services, he leased over 100 properties and managed a self-storage facility along with a print shop.
His parents operated an insurance and real estate business in the region, and the Marshall name was held in high regard within the community.
Even though he left college, he was a tax professional registered with the federal government. To people in the region, he appeared to have a good understanding of finances and maintained a tidy office.
“He owned French doors and a lovely carpet, along with a large desk, and he appeared to be wealthy and trustworthy,” Corrigan stated.
Marshall started collecting funds from individuals to acquire and manage rental properties during the 1980s. Participants received promissory notes—pieces of paper indicating the monetary amount. Withdrawals were possible with a 30-day notice. Individuals had the option to receive periodic interest payments.
Participants viewed the transactions as investments. Marshall has referred to them as loans.
For many years, Marshall fulfilled his commitments to pay interest and handle withdrawals. More individuals joined as news spread. Sullivan remembers how his parents gave Marshall money, then he did, followed by his fiancée, then his fiancée’s daughter, then his son, and even his snowmobile club.
“Everyone ends up getting caught up in it,” Sullivan said.
Several investors resided in different states, yet maintained ties to the region.
An 8% return was not notable in the 1980s, when interest rates were higher. However, it became significant as rates decreased. Marshall mentioned in a bankruptcy hearing that he expected the growth in his real estate to exceed his debts.
That’s clearly not true anymore,” he stated, as per the documents, “but that’s always been my belief.
Dealing with over $90 million in outstanding debt
The funds ceased by 2023.
Marshall sought Chapter 11 bankruptcy protection in April, stating over $90 million in debts and $21.5 million in assets, primarily consisting of real estate.
He stated in a document that he had been hospitalized due to a “serious heart condition” which necessitated two operations, resulting in $600,000 in expenses. As news of his health issue became public, there was a rush by note holders requesting their funds back.
The bankruptcy trustee, Fred Stevens, attributed Marshall’s financial downfall to poor business decisions and taking loans from individuals at higher-than-standard interest rates. The trustee argued that by 2011, Marshall was utilizing fresh investment funds to settle earlier investors, a characteristic feature of a Ponzi scheme.
Prosecutors allege that Marshall incorrectly portrayed the financial success of his real estate company and instructed his team to create “transaction summaries” containing false details regarding account balances and accumulated interest.
Funds were directed to his other ventures, and he used hundreds of thousands of investors’ money for personal expenses such as air travel, dining out, grocery shopping, and yoga studio memberships, as stated by prosecutors.
Marshall’s clients feel betrayed.
“We left it there so that it could gather. Well, it gathered in his pocket,” Barbara Baltusnik said about her investment.
The consequences of multi-million dollar losses
Marshall entered a not guilty plea in June regarding allegations of grand larceny and securities fraud. He is accused of taking over $50 million.
Marshall’s home and properties were offered as part of a bankruptcy proceedingproceedings, which are ongoing. Individuals who provided Marshall with funds may recover approximately 5.4 cents for each dollar from the asset sales. Claims against financial institutions are being pursued, as stated by the trustee.
Baltusnik mentioned that she and her spouse were owed hundreds of thousands of dollars, and now she is concerned about how she will cover medical expenses. Sullivan’s mother moved in with him following the loss of her investment.
In Epworth, Georgia, retiree Carolyn Call will never receive the money she had hoped would supplement her Social Security income. She learned about Marshall through an uncle who resided in upstate New York.
I’m just managing to cover my expenses and keep moving forward,” she said. “Nothing luxurious. No vacations. I can’t really do much for the grandchildren.
