A federal jury convicted Ferrum Capital owners Joshua Allen and Michael Cox on all four counts on 18 August after a weeklong trial in San Antonio. The US Attorney’s Office for the Western District of Texas announced the verdict on 19 August. Allen and Cox were taken into federal custody immediately, and each faces a stated statutory maximum of 70 years in prison.The DOJ release and the July 2025 indictment list the four counts as conspiracy to commit wire fraud, conspiracy to commit money laundering, conspiracy to launder monetary instruments and securities fraud. The case centered on four related businesses jointly owned and controlled by Allen and Cox: Ferrum Capital, Ferrum II, Ferrum III and Ferrum IV. US District Judge Fred Biery scheduled both men for sentencing on 10 December. The 70-year figure is a maximum across the counts rather than a sentence already imposed or a forecast of what either defendant will receive.
How The Ferrum Investment Worked
Allen and Cox raised money through the Ferrum entities with help from Brooklynn Chandler Willy and others acting at their direction. Willy owned Chandler Capital Holdings and Queen B Advisors, which traded as Texas Financial Advisory and offered asset management and financial planning services. According to the verdict release, the three concealed high commissions, misrepresented the security of the investments and lied about how the money would be used.Trial reporting by the San Antonio Express-News said the Ferrum notes were presented as investments in distressed accounts receivable purchased by Collins Asset Group. Investors were generally promised quarterly returns of 8 percent or annual returns of 10 percent, with principal returned when four-year notes matured. Prosecutors said new investor money was instead used to pay earlier investors, conceal the shortfall and keep new money coming in, while part of the funds benefited Allen, Cox and Willy.The structure matters because the underlying story was more plausible than the implausible guaranteed-return pitches seen in some retail scams. Distressed-debt investing is a real business, and promissory notes can look familiar to investors seeking income. The fraud established at trial depended on assurances about security, collateral and use of proceeds, combined with personal relationships and the appearance of professional financial advice.
The Amount Raised Depends On The Scope
The Justice Department’s verdict release does not give a precise total, stating only that hundreds of victims collectively lost millions of dollars. At an August 19 post-verdict briefing, investigators put the scheme at about $80 million raised, approximately $50 million lost and more than 500 victims. Officials also said Allen and Cox kept at least $9 million for personal use.The Express-News reported that the indictment put Ferrum fundraising at about $67 million and that prosecutors told jurors Allen, Cox and Willy personally received approximately $9.1 million. Those figures describe the Ferrum operation addressed in the indictment and at trial, while the post-verdict figures are rounded estimates presented after the convictions.A separate FBI victim-identification page uses a broader figure. It says more than 400 investors placed over $100 million with Allen, Cox and Willy through Ferrum entities and related conduct. The figures should not be treated as interchangeable: one concerns the Ferrum amount described in the indictment and at trial, while the FBI page seeks victims across the three defendants’ wider investment activity.Similar scope problems recur in financial-fraud coverage, where money raised, investor losses, restitution and personal proceeds can all produce different totals. A recent $39 million bank-fraud case involving Ponzi-style repayments, for example, resulted in restitution of $19.4 million and forfeiture of $21.8 million. The numbers answer different questions and should remain separately labelled.
Brooklynn Willy Pleaded Guilty Before Trial
Willy did not stand trial with Allen and Cox. She pleaded guilty to ten federal counts in March 2026, including six counts of wire fraud, wire-fraud conspiracy, money-laundering conspiracy, an unlawful monetary transaction and aggravated identity theft. Her sentencing is scheduled for 14 December.The plea materials describe conduct extending beyond the Ferrum notes. In one instance, a couple invested $500,000 through Chandler Capital Holdings for an intended investment, but Willy used the money for credit-card payments, payments to other investors and another business she controlled. In another, she persuaded a married couple to invest roughly $2 million for bad-debt purchases and other purported investments, then used the money for herself, an associate and other investors.During the federal investigation, Willy forged victim signatures and gave the resulting documents to investigators, according to her plea. That conduct produced the aggravated identity-theft count, which carries a mandatory two-year prison term that must run consecutively to any other punishment. Her total theoretical exposure is far higher than a likely guideline sentence because several counts each carry maximum terms of 20 years.
The Regulatory Record Predated The Criminal Case
The criminal prosecution followed an earlier state regulatory action involving Willy. In October 2020, the Texas Securities Commissioner suspended her investment-adviser registration for one year and ordered the repayment of $2.75 million in commissions from alternative investments sold between 2014 and 2019.The state found that Willy had sold alternative investments without disclosing that activity to the advisory firms with which she was registered. It also found that she had not performed reasonable due diligence on suitability and had recommended that some conservative, unsophisticated clients place nearly half their liquid assets into private, illiquid investments. The order imposed limits on Queen B Advisors, including a prohibition on recommending alternative investments.That history is relevant to the Ferrum case because it shows how private investments, undisclosed compensation and adviser trust combined before the federal charges. It also separates this matter from online-only schemes. Recent cases involving an Illinois adviser accused of fabricating account statements and a UK Ponzi operator who recruited through Facebook ads used different distribution channels, but all relied on investors accepting representations that could not be independently reconciled with the movement of money.
Trust Was Part Of The Sales Process
Prosecutors said Allen and Cox invoked their faith and standing in the community while collecting fees and making false statements. US Attorney Justin Simmons said, “In the midst of this Ponzi scheme, Allen and Cox collected a handsome fee by telling various egregious lies, even using their self-proclaimed faith and reputation in their community to con the investors they victimized.”The use of community trust is a recurring feature of affinity fraud. It reduces the perceived need for independent checks and allows existing investors to become informal proof for later participants. That mechanism can sustain a scheme even when its promised returns are less extreme than those in cases such as the Forcount Ponzi promotion or the HashFlare crypto-mining fraud.Victims may also face risks after a scheme collapses. A separate federal case recently produced a 14-year sentence after fraudsters impersonated federal agents and targeted earlier investment-fraud victims with promises of recovering their money. Officials said after the Ferrum verdict that they would continue pursuing money for victims, although they did not identify an expected recovery amount or timetable. They declined to say whether further indictments were under consideration.
What Happens Before Sentencing
US District Judge Fred Biery will determine the sentences after considering the advisory federal sentencing guidelines and other statutory factors. Loss calculations, the number of victims, each defendant’s role, obstruction findings and acceptance or absence of acceptance of responsibility can affect the guideline analysis. The statutory maximum limits the available punishment but does not establish the term the court will impose.Allen and Cox remain in federal custody and are due to be sentenced on 10 December. Willy’s sentencing follows four days later on 14 December. IRS Criminal Investigation and the FBI investigated the case, with Assistant US Attorneys Joe Blackwell and Sam Shapiro handling the prosecution.
