Ferrum Capital was founded in late 2017 by Joshua Allen and Michael Cox in Lubbock, Texas. The company marketed itself as a lending operation, collecting money from investors in the form of loans and then lending that money to other entities. By presenting itself as a stable and secure investment opportunity—often leaning heavily on the personal Christian faith of its founders to build trust—Ferrum Capital was able to attract hundreds of investors. Much of the money Ferrum collected from investors was then loaned to a third-party debt collection company called Collins Asset Group (CAG). Investors were told that CAG would use these funds to purchase and collect on bad debt for a significant profit, with Ferrum promising its investors high returns and the protection of collateral.
In early 2021, individual investors began reporting significant losses after being promised high, secure returns on promissory notes issued by and its associated entities.
[Retail Investors] ──> [Ferrum Capital / II / IV] ──> [Collins Asset Group (CAG)] │ │ (Secret High Commissions) (Defaulted 2023) ferrum capital lawsuit 2021
were indicted for conspiracy to commit wire fraud, money laundering, and securities fraud The Alleged Scheme
The year marked a critical turning point for the scheme: Former Texas advisor pleads guilty in Ponzi scheme. Ferrum Capital was founded in late 2017 by
Specifically, the lawsuit alleged that Ferrum Capital had overstated the returns on several of its investment funds, and that the company had failed to disclose significant risks associated with these investments. The plaintiffs also alleged that Ferrum Capital had engaged in a practice known as "churning," in which the company would rapidly buy and sell securities in order to generate commissions, rather than to benefit the investors.
Adkins invested nearly $500,000 — about 20 years of his savings. He was promised $615,000 by October 2024. He never received a dime. Much of the money Ferrum collected from investors
Investors were told that their money was safe, fully collateralized, and backed by lower-risk consumer debt portfolios managed by Austin-based . In reality, the notes were unregistered securities sold in direct violation of Texas state law, and the returns promised to victims were entirely artificial. Anatomy of the Ponzi Scheme
The represents one of the most significant financial fraud investigations in recent Texas history, unravelling a massive multi-million-dollar Ponzi scheme that devastated hundreds of investors . While the widespread civil litigation and federal criminal indictments peaked years later, the roots of the fraud—and the critical evidence driving the legal fallout—directly trace back to aggressive investment solicitations and transactions executed in 2021 .
: In October 2020, the TSSB determined that Ferrum's promissory notes were unregistered "alternative securities" . By 2021, affiliate Brooklynn Chandler Willy