Ferrum Capital Lawsuit 2021 |best| Jun 2026

Perhaps most damning: some of the money never entered any investment at all, according to Price. In classic Ponzi fashion, the FBI noted that Allen, Cox, and Willy "used new investor money to lull earlier investors" — paying returns to early participants with funds extracted from later ones.

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: Federal prosecutors highlighted a 2021 instance where financial advisor Brooklynn Chandler Willy allegedly convinced a couple to invest

The represents one of the most significant financial fraud investigations in recent Texas history, unravelling a massive multi-million-dollar Ponzi scheme that devastated hundreds of investors . While the widespread civil litigation and federal criminal indictments peaked years later, the roots of the fraud—and the critical evidence driving the legal fallout—directly trace back to aggressive investment solicitations and transactions executed in 2021 . ferrum capital lawsuit 2021

Promising high, fixed annual returns between 8% and 10%, the defendants pitched these vehicles as secure, fully backed positions. They told clients that their money was being used strictly by third-party agencies to buy up underpriced, distressed consumer debt portfolios for pennies on the dollar and collect the balances for high margins.

Ferrum Capital was founded in late 2017 by Joshua Allen and Michael Cox in Lubbock, Texas. The company marketed itself as a lending operation, collecting money from investors in the form of loans and then lending that money to other entities. By presenting itself as a stable and secure investment opportunity—often leaning heavily on the personal Christian faith of its founders to build trust—Ferrum Capital was able to attract hundreds of investors. Much of the money Ferrum collected from investors was then loaned to a third-party debt collection company called Collins Asset Group (CAG). Investors were told that CAG would use these funds to purchase and collect on bad debt for a significant profit, with Ferrum promising its investors high returns and the protection of collateral.

Walt Collins, the namesake of CAG, was deposed in April 2024 at the Omni Barton Creek Resort in Austin, but a full transcript only recently entered court records. During the deposition, Collins was asked repeatedly about what happened to the investors' money. "You're asking me — where's the rest of the money? I really want to know that. I don't know," Collins said when pressed. Perhaps most damning: some of the money never

New York usury laws cap interest rates on loans at 16% for corporations (and 25% for non-bank lenders). The defendant argued Ferrum’s 2.5x multiplier effectively represented an annual interest rate exceeding 150%—making the agreement criminally usurious and thus unenforceable. Ferrum countered that litigation funding is not a "loan" but an "investment" in a legal asset, exempt from usury laws. This became the central legal battleground.

The lawsuit did not go to a full jury trial. In , the parties announced a confidential settlement. While the terms were sealed, several sources close to the matter (including anonymous comments to Bloomberg Law and Law360 ) indicated:

The Ferrum Capital saga is a cautionary tale for anyone in the real estate investment space. Whether you are a passive investor looking for yield or an active borrower seeking leverage, the 2021 lawsuit highlights three critical lessons: For legal advice, consult a professional

The courts were tasked with untangling the financial mess to determine who actually owned the rights to the loans Ferrum had originated. For the plaintiffs (the investors), the goal became recovering whatever assets remained, often through the foreclosure of properties Ferrum held interests in.

Victims were misled about the security of their investments and the high commissions taken by the firm's owners, Joshua Allen and Michael Cox.