FAYETTEVILLE – A federal jury returned Friday morning all guilty verdicts against two men accused of defrauding investors in a wind farm project in Elm Springs and the development of a wind turbine that was never built.
Jody Davis and Phillip Vincent Ridings have been charged with nine counts of wire fraud, aiding and abetting wire fraud, money laundering and aiding and abetting money laundering.
The men will be sentenced in about four months after the PSR is complete. The jury deliberated about three hours over two days before delivering a verdict.
Ridings and Davis, CEO of Dragonfly, were convicted of conspiracy to commit wire fraud. Both were also convicted of four counts of wire fraud and aiding and abetting wire fraud.
The two men were also jointly convicted on two counts of money laundering, and both were individually convicted on one different count each.
U.S. District Judge Timothy L. Brooks allowed Davis and Ridings to remain free on bond and existing terms until their conviction, although he was somewhat reluctant to do so in Davis’ case.
Both will be monitored by GPS and their movements will be severely restricted. Ridings lives in Little Rock and Davis has a residence near Searcy.
Brooks said he was concerned Davis might violate the terms of his release because he may not have correctly reported the assets and debts related to a house he is buying and how the payments are. performed on this house.
Davis told the judge that his employer paid for his house for him and that the house is in his wife’s name. His employer’s name appeared in connection with Dragonfly and the wind turbine as a potential investor during the lawsuit.
“It sounds unusual,” Brooks said. “You may be in violation of not taking on new debt.”
Brooks asked for more information on the arrangement of the house.
Brooks specifically prohibited Ridings from soliciting investments for any type of wind turbine, regardless of its name. He cannot take on new debt either. Davis can in no way be involved in the books, accounts or solicitation of business for his employer, who he claims builds homes from shipping containers.
Both are prohibited from having firearms.
Brooks urged the men to carefully review their terms of release.
“Any violation of the bail conditions, and I will not hesitate to remand you in custody,” Brooks warned.
A federal grand jury entered an indictment of nine counts in January 2020 against Davis and Ridings.
Davis and Ridings intentionally misled investors in the wind farm project about the project’s financial viability and potential returns on investment, according to the indictment.
Specifically, they told investors that they had developed cutting-edge wind turbine technology, that a prototype was in development, companies were lining up to buy it, and a federal grant of $ 10 million. of dollars was imminent, according to the indictment. None of this was true.
A third man, Cody Fell, who is Davis’ brother-in-law and worked at Dragonfly for a time, pleaded guilty in December 2018 to federal charges of wire fraud and tax evasion.
Fell agreed to cooperate with the government and testified that he received more than $ 100,000 in money from investors in Davis and Ridings. Fell was not convicted.
In closing argument Thursday, Assistant United States Attorney Kenneth Elser told jurors that Dragonfly was nothing but a long-term scam that earned Davis, Ridings and others over $ 700,000 between 2014 and 2018.
Davis and Ridings argued that they had no intention of defrauding investors, but they used investor money for personal expenses, including cars, food, jewelry, vacations, and a down payment on a bank account. House.
Prosecutors said they lied to investors about the use of their money and the progress of their wind turbine, sent fraudulent documents and divided investor money. Jurors were shown in detail how the money entered went through bank accounts and was ultimately spent.
The scam erupted when Dragonfly came to the attention of the Arkansas Securities Department.
The department issued a cease and desist order against the company on August 11, 2016, prohibiting Dragonfly from selling unregistered securities to investors. The FBI opened an investigation soon after.
Davis and Ridings scammed six investors in northwest Arkansas and southwest Missouri, according to the indictment. Investors have lost amounts ranging from $ 13,000 to $ 300,000, according to the indictment. There have been other casualties in Iowa and Texas, prosecutors said.
Dragonfly sought to rezon 312 acres in Elm Springs in late 2015 to allegedly build a wind farm. Opponents of the wind farm have collected petitions to force a special election that prompted Dragonfly to abandon the project.
Davis pleaded guilty in 2009 to wire fraud and money laundering after embezzling approximately $ 785,000 in Oklahoma. He served a sentence in a federal prison.