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New From Us—J&J Purchasing: When It Sounds Too Good To Be True
https://hindenburgresearch.com/jj-purchasing
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https://hindenburgresearch.com/jj-purchasing
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As some readers of Hindenburg may be aware, our founder, Nate Anderson, got his start in the fraud research world by investigating suspected Ponzi schemes and private market fraud. Today, we go back to our origins.
We have been researching a firm we believe to be a Ponzi scheme called J&J Purchasing.
It has pitched potential clients on an investment offering 50% returns with virtually zero risk. It claimed to have raised $400M from over 1,000 investors since 2016.
It has pitched potential clients on an investment offering 50% returns with virtually zero risk. It claimed to have raised $400M from over 1,000 investors since 2016.
As our research explains, the firm in question had no marketing materials and worked solely on "word of mouth", primarily within the Mormon community. The top principals rarely met investors, requiring us to pose as investors to work our way up the pyramid.
Our work included in-house research, extensive document review, and hosting key J&J marketing managers in a private jet we rented under the guise of being 'whales'.
We rigged the jet with hidden video and audio recording equipment for our meeting.
We rigged the jet with hidden video and audio recording equipment for our meeting.
Along the way, we were repeatedly told that J&J’s founder, Jeff Judd, never met with investors, in what we believed to be an effort to silo him from future blowback.
We eventually managed to speak with Judd and documented the call.
We eventually managed to speak with Judd and documented the call.
We shared our work with the WSJ, which reported on the story earlier: https://www.wsj.com/articles/an-alleged-fraud-uncovered-by-a-short-seller-ends-in-gunfire-11648051215
As is customary with our fraud research, we also submitted our evidence to regulators.
As is customary with our fraud research, we also submitted our evidence to regulators.
Earlier this month, Federal authorities visited one of the firm’s key principals, 49-year-old attorney Matthew Beasley, in order to question him, according to court records
Upon seeing FBI agents at his door, Beasley pointed a gun to his own head. The agents implored him to drop the weapon. Beasley instead pointed the weapon at the agents, who then opened fire, striking him in the chest and shoulder.
Beasley survived, and barricaded himself behind his door.
Then, throughout the course of a 4-hour negotiation/stand-off, Beasley “repeatedly confessed to his involvement in what he described as a Ponzi scheme”, according to a court transcript.
Then, throughout the course of a 4-hour negotiation/stand-off, Beasley “repeatedly confessed to his involvement in what he described as a Ponzi scheme”, according to a court transcript.
An asset search by Hindenburg revealed that, over the last several years, the firm's principals bought 16 luxury vehicles estimated to be worth $2.6 million including a $400k Rolls Royce.
They also bought million-dollar properties & a private jet.
They also bought million-dollar properties & a private jet.
On March 9, 2022, additional court filings show Beasley appears to be on the path to a plea bargain for the charges stemming from the incident with the FBI, with Beasley’s lawyer suggesting he expects additional forthcoming charges.
Based on the expediency of regulatory intervention, J&J was halted before it managed to grow even larger. We view this as an example of effective, expedient enforcement by regulators.
You can read our full report to learn about what happened with J&J Purchasing here: https://hindenburgresearch.com/jj-purchasing
