Judge tells Ponzi scheme figure Edward May he owes victims more — much more

Edward May, president of Lake Orion-based E-M Management Co. LLC and perpetrator of what is thought to be the largest Ponzi scheme in Michigan history, must pay $49.4 million in restitution even though he has contended he owes much less.

This month, May, 75, received a sentence of 16 years in federal prison from Judge Arthur Tarnow of U.S. District Court in Detroit after pleading guilty to 59 counts of mail fraud in the decade-long scheme. But Tarnow held off on a judgment ordering restitution until this week, because May still contested the amount owed when he was sentenced.

A receiver appointed by May to handle his assets and a CPA assisting his attorney together reviewed a forensic accounting by Bloomfield Hills-based O’Keefe & Associates Inc.to calculate investment losses. They concluded that the victims who submitted loss statements are owed only $17 million.

Federal officials contended that the losses totaled $49 million and offered evidence of more than 720 victims in the May scheme, according to court records. While May acknowledges there are more than 250 victims, the defense contends not all victims submitted proper documentation of losses, the government’s estimates have changed over time, and some alleged victims may have profited as early investors.

May was accused of orchestrating a scheme involving investments of more than $350 million in more than 250 phony limited-liability companies.

In 1997 he formed E-M Management and began setting up LLCs and telling investors that the companies had contracts to provide telecommunication services in hotels in Nevada, New York, New Jersey, California and other countries.

Federal officials have said May guaranteed monthly returns ranging from $30,000 to more than $100,000, paying off earlier investors with money from later investors. He often used proceeds for his own purposes, including trips to Las Vegas and gambling.