In a case that blends financial fraud with cinematic absurdity, California-based investment promoter Matthew Piercey has pleaded guilty to orchestrating a $35 million Ponzi scheme that targeted retail investors through two sham firms—and culminated in a failed underwater escape attempt from federal authorities.
Piercey, 48, entered his plea on charges of wire fraud, money laundering, and witness tampering, nearly two years after a high-profile incident in which he attempted to evade FBI agents using a submersible scooter in Lake Shasta. The bizarre episode made national headlines but also underscored the lengths to which some fraudsters will go to avoid accountability.
The case stems from Piercey’s operation of Family Wealth Legacy and Zolla, two entities he used to solicit funds from investors under the guise of sophisticated, algorithm-driven trading strategies. He pitched what he called the “Upvesting Fund,” a purported high-frequency investment vehicle powered by proprietary technology. No such fund or algorithm existed. Instead, funds were diverted for personal expenses, including residential real estate, legal fees, and recreational assets.
“Many of the victims invested substantial portions of their life savings,” said FBI Special Agent in Charge Sid Patel. “They were misled into believing they were participating in a legitimate, high-yield investment platform.”
From 2015 to 2020, Piercey and his business partner Kenneth Winton marketed the Upvesting Fund as a unique opportunity to benefit from exclusive, technology-based trading. Early investors were paid with funds from new participants, the classic hallmark of a Ponzi scheme. Of the $35 million raised, only $8.8 million was returned to investors, according to federal prosecutors.
Winton, who initially entered the scheme as an investor before becoming an operational partner at Zolla, has also pleaded guilty and is cooperating with authorities.
Piercey’s fraud unraveled in November 2020, when FBI agents arrived with a warrant. He fled the scene in his pickup truck before abandoning it at the shoreline of Lake Shasta. In a failed effort to avoid arrest, Piercey entered the water with a Yamaha 350Li submersible scooter—a consumer-grade device used for recreational diving. Agents tracked his bubbles for approximately 25 minutes before taking him into custody after he emerged cold and disoriented.
Following his arrest, Piercey engaged in a series of obstruction efforts, including instructing associates to ignore subpoenas and sending coded messages from jail. According to court filings, he attempted to coordinate the removal of evidence from a U-Haul storage unit rented under a false identity. The locker contained ₣31,000 in Swiss francs and a disguise kit including a wig—suggesting preparations for potential flight from the country.
Despite his claims of sophisticated investment prowess, Piercey ran a rudimentary fraud bolstered by misleading investor presentations, false performance statements, and affinity-based recruitment strategies. The SEC, which filed civil charges in parallel with the DOJ’s criminal prosecution, noted that many of Piercey’s victims were solicited through personal networks and faith-based communities.
For RIAs and wealth managers, the case is a sobering reminder of the risks posed by unregistered investment products and unverified algorithmic strategies—particularly when offered by firms lacking custody transparency, compliance infrastructure, or independent audit validation.
The fraudulent structure of Family Wealth Legacy and Zolla lacked core governance principles. No third-party administrator, no performance attestation, and no traceable documentation supporting the existence of the so-called Upvesting Fund. Piercey’s reliance on vague descriptions of algorithmic technology is a common tactic among bad actors seeking to impress non-technical investors.
Authorities emphasize the importance of performing thorough due diligence and utilizing independent custodians, particularly when assessing high-return investment opportunities pitched outside of conventional financial channels.
Sentencing for Piercey is scheduled for September 4. He faces up to 20 years in federal prison for each count, with additional penalties likely for his efforts to obstruct justice post-arrest.
As for the now-infamous Yamaha sea scooter, it may have failed to deliver an escape, but it succeeded in drawing attention to the broader pattern of deception Piercey used to defraud clients for over five years.
The case highlights critical lessons for fiduciaries: verify fund structures, assess operational transparency, demand audited performance, and remain skeptical of guaranteed returns—especially when they come wrapped in complex-sounding jargon or unverifiable algorithms.
Ultimately, what looked like a cutting-edge financial product was nothing more than a high-tech façade over a classic Ponzi scheme. For RIAs serving high-net-worth and mass-affluent clients alike, vigilance against these schemes is not just a matter of compliance—it’s a cornerstone of ethical advisory practice.
