Good morning, drivers! Looks like it’s time for some more crime and punishment. This time, a specter of Marlin Transport’s founding and “supposed Nascar team owner” Franklin Ray is back in the scene on suspicion of again running a Ponzi scheme to defraud everyone from investors to the U.S. COVID PPP program. Yeah, I think he bit off more than he could chew this time. The Southern District of New York (SNDY) has leveled seven counts against Ray and two against a co-conspirator for wire frauds, conspiring to commit wire frauds and identity thefts. Now to get to the meat and potatoes of this, or should we say a few thousand trucks that didn’t exist.
“There’s a sucker born every day”
So here’s the gist of it. Prosecutors say Franklin formed a trucking and logistics firm, “CSA Business Solutions LLC,” and asked investors to give him $20,000. In return, he would pay them 77 PERCENT of the net income of each truck. That right there should have been the sign of business malpractice. Ugh, how are you going to stay in business with just 23% of the take. That’s not enough to pay the expenses of the truck and driver. Guess there’s a sucker born every day.
After he received the funds, he actually had two trucks and four drivers on payroll. Then the company suddenly ballooned up to over 4,000 trucks and drivers! And what’s shocking is that it happened after his arrest but before the grand jury indictments. Quick explosive growth should have sounded an alarm, but FMCSA only runs its new-company audit after 12 months. Because you can add and subtract trucks from fleet counts at any time, it did not raise red flags. Clarissa Hawes from FreightWaves has more details of this in her story.
And yes, he has done this before…
So why does Franklin Ray sound familiar to truck drivers? He helped “open” Marlin Transport and “MNR Productions”. Well, remember back in 2005, it was that production company he ran on the side that got him a prison term. He tried to convince investors he was a “buyer” for BAM racing, a NASCAR Nextel team. He defrauded the co-owner of BAM for over $265,000, then used that money to pretend to be an agent for BAM and several country music artists. He then fooled several travel companies for limo rides, private air travel and helicopter services. He also bought charter flights with invalid credit cards and then further defrauded BAM racing by claiming to sponsor six races for another $750,000. He spent less than two years in prison for all of this. Sentenced in 2008, released in 2010. Got to love our legal system.