Ponzi Schemer Can't Get Early Release Over COVID-19 Fears

By Rachel O'Brien
Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our daily newsletters. Signing up for any of our section newsletters will opt you in to the daily Coronavirus briefing.

Sign up for our Asset Management newsletter

You must correct or enter the following before you can sign up:

Select more newsletters to receive for free [+] Show less [-]

Thank You!



Law360 (July 17, 2020, 3:14 PM EDT) -- A Pennsylvania federal judge on Thursday denied a Ponzi schemer's request to leave prison during the COVID-19 pandemic for fear of catching the virus, saying his epilepsy has been exaggerated or even fabricated, he has served less than two years of a 22-year sentence and he may still be a danger to the community.

U.S. District Judge Joel H. Slomsky said that despite Troy Wragg's statements to the contrary, Wragg, who perpetrated a $54 million Ponzi scheme, only has a "speculative risk" of contracting COVID-19 while incarcerated in the federal correctional institution at Fort Dix, New Jersey.

Wragg's May 13 request to serve the remainder of his sentence at home or have it reduced to time served was denied because "he has not shown extraordinary and compelling reasons for his release," and even if he did, "factors counsel against a reduction or modification of his sentence," Judge Slomsky said.

Wragg, 38, and two co-defendants were charged in September 2015 with wire fraud and securities fraud for convincing investors to liquidate their savings, including 401(k) plans and mutual funds, to invest in phony green energy company Mantria Corp., prosecutors said.

In March 2017, Wragg pled guilty and while he was out on bail, he tried to collect more than $100,000 in investment money from a woman for a phony online dating service he branded as LUVR.

After been sentenced to 22 years for wire fraud, securities fraud and conspiracy in August 2019, Wragg first asked the Bureau of Prisons for compassionate release in March.

The BOP denied his request, which included Wragg's claims that he suffers from major depressive disorder and a "severely weakened immune system," making him susceptible to the flu, as well as from hypertension and "severe uncontrolled epilepsy."

Wragg argued his conditions put him at risk of "far more serious complications than the general public" if he contracts the COVID-19 virus and said that "social distancing is not an option" while living in cramped quarters in prison.

Wragg said BOP Health Services have neglected his medical needs, as he experienced a severe grand-mal seizure in January 2019 that resulted in a broken wrist. And in January 2020, his seizures became more frequent, so BOP increased his seizure medication, Keppra, to the highest level allowed, he said.

Beginning March 21, he had 15 seizures over 21 days because he wasn't given the proper dosage, he said, and BOP staff didn't respond to his request for medicine for four days.

On May 22, Wragg filed a supplement to his motion, saying the number of seizures increased from 15 to 26 in a one-week period, and his most recent seizure on May 21 was the "most severe to date that [he] has experienced while in BOP custody."

On Thursday, the judge also denied his request, agreeing with the government's opposition, which said Wragg exaggerated the severity of his medical conditions, had only served a small portion of his sentence and would continue to be a danger to the community if released.

Prosecutors argued Wragg didn't seek treatment for his ailments or take his prescribed medicine to "engineer his own release from prison by exacerbating his own medical problems."

They cited his prison medical records, which state he purposely didn't take his medication in several instances, refused treatment at a hospital and failed to report his recent streak of at least 16 seizures to BOP medical staff.

If he takes his medication as prescribed, the BOP can adequately manage his conditions, prosecutors argued.

Wragg "has not shown the kind of particularized vulnerability to COVID-19 needed to constitute compelling reasons for release," Judge Slomsky said. "The court further finds the authenticity and severity of defendant's seizure disorder questionable."

Prosecutors pointed to a statement from Wragg's former psychiatrist, Dr. Jeffrey E. Summerton, who noted that Wragg's prior doctors thought his seizures were more likely due to alcohol withdrawal than epilepsy.

Wragg had submitted a letter from Dr. Brittany Jones, who treated him before his incarceration, advising that Wragg "could be at a heightened risk of death secondary to his medical conditions" and warned of his "significant history of suicide attempts, including drinking bleach and not taking his seizure medication in order to kill himself via grand mal seizure."

But the judge called the letter "puzzling," in that the doctor's own name was misspelled and her vague analysis of Wragg's condition was "perfunctory."

While Wragg said there were more than 70 inmates infected with COVID-19, the government said they are all housed in a different section of the prison, the judge's order noted. The government reported that there have been no positive cases in Wragg's unit and no deaths in the entire complex.

Wragg has no immediate or certain risk of contracting the virus and doesn't have a terminal illness like cancer, ALS, or advanced dementia, that would suggest an "end of life trajectory," the judge said.

But even if his condition was "extraordinary and compelling," he shouldn't be released because of his criminal history and the short amount of his sentence that he has served, the judge said, agreeing with prosecutors.

A spokesperson for the U.S. Attorney's Office for the Eastern District of Pennsylvania declined to comment Friday.

Counsel for Wragg didn't immediately respond to a request for comment.

Wragg is represented by Evan T.L. Hughes of Hughes Firm LLC.

The government is represented by Robert Livermore and Sarah Wolfe of the U.S. Attorney's Office for the Eastern District of Pennsylvania.

The case is U.S. v. Troy Wragg, case number 2:15-cr-00398, in the U.S. District Court for the Eastern District of Pennsylvania.

--Additional reporting by Matt Fair. Editing by Alyssa Miller.

For a reprint of this article, please contact reprints@law360.com.

Attached Documents

Useful Tools & Links

Related Sections

Case Information

Case Title

USA v. WRAGG et al


Case Number

2:15-cr-00398

Court

Pennsylvania Eastern

Nature of Suit

Date Filed

September 02, 2015

Government Agencies

Judge Analytics

Hello! I'm Law360's automated support bot.

How can I help you today?

For example, you can type:
  • I forgot my password
  • I took a free trial but didn't get a verification email
  • How do I sign up for a newsletter?
Beta
Ask a question!