A former Lititz resident now living in North Carolina has acknowledged his role in organizing a scam that bilked investors of several million dollars over a 12-year period. 

Marlin S. Hershey, 53, of Cornelius, North Carolina, pleaded guilty Thursday in federal court to wire fraud conspiracy. His business partner, Dana Bradley, also 53, of Cornelius, North Carolina, pleaded guilty as well. The U.S. District Attorney’s Office in the Western District of North Carolina announced the pleas Thursday.

From 2009 to 2021, Hershey and Bradley defrauded numerous investors by getting them to buy into a pair of unregistered securities, Performance Retire on Rentals, LLC, and Distressed Lending Fund. The business partners disclosed false or misleading information about the securities, or chose not to provide information, to convince them to invest.

For example, investors were told nobody would be paid a commission, when in fact Hershey and Bradley took a 10% commission on initial investments, with additional commissions levied on follow-up investments. Hershey and Bradley also received undisclosed “management fees” from the various entities through which they took investments.

Hershey and Bradley hid the true financial condition of investments by making undisclosed loans to various entities so they could pay investment returns, and then used money from new investors to repay those loans, like a Ponzi scheme.

In 2019, investors started to learn the securities they bought into were in financial distress. In April 2022, a federal grand jury indicted Hershey and Bradley.

The wire fraud charge carries a maximum penalty of 20 years in prison and a $250,000 fine. A sentencing date has not been scheduled. After pleading guilty Thursday, the defendants were released on bond.

This isn’t the first time Hershey and Bradley were linked to illegal investments.

In October 2019, the Securities & Exchange Commission opened a civil fraud case against them, alleging they raised $20.2 million from dozens of investors, including family and friends, and then used $2.7 million to pay themselves commissions and pay off earlier debts.

That SEC case was settled in September 2020 when Hershey and Bradley, without admitting guilt, each agreed to forfeit $20,000 profit and pay a civil penalty of $193,000.