A deceased federal-benefits consultant has been charged with running a 22-year Ponzi scheme that defrauded federal and state law enforcement officers and other government employees of at least $34 million.

The Securities and Exchange Commission on June 24 filed fraud charges against the estate of Kenneth Wayne McLeod of Jacksonville, Fla., his benefits consulting firm, Federal Employee Benefits Group Inc., and his registered investment adviser, F&S Asset Management Group Inc.

McLeod died June 22 of a self-inflicted gunshot wound, the Jacksonville, Fla., Sheriff's Office said.

The SEC has frozen all assets involved, and said it is unclear who controls FEBG and FSAMG since McLeod's death.

"McLeod victimized law enforcement agents and other government employees who dedicated their lives to the service of this country," said Eric Bustillo, director of the SEC Miami regional office. "The victims gave years of public service, and McLeod stole their futures."

According to the SEC's complaint, McLeod raised at least $34 million from about 260 investors — most of whom were federal and state employees and retirees — since 1988. McLeod promised to invest their money in tax-free, secure government bonds and promised annual returns of 8 percent to 10 percent, the SEC said.

Instead, the SEC said McLeod invested none of the money. He used money raised from new investors to pay interest and principal for old investors, and to cover the costs of running FEBG and FSAMG, the SEC said. The complaint said that McLeod persuaded many investors to "reinvest" their interest and principal into the fraudulent bond fund.

"The bond fund has been FEBG's greatest source of income for at least the past four years," the SEC said. "FEBG has survived on Ponzi proceeds and has not been profitable since at least 2004."

Some investors were able to redeem their investments. But SEC said McLeod lied to others who tried to get their money back, and told them payments would be delayed because the government was behind on its payments, or that the bonds were long-term and they couldn't redeem them at that point.

McLeod also used money raised through the bond fund to pay for annual trips to the Super Bowl for himself and about 40 friends, as well as sports stadium box seats and other entertainments.

The SEC said federal and state agencies across the country hired McLeod to host retirement planning seminars, which is where he met many of his alleged victims. Agencies paid McLeod up to $15,000 apiece for these seminars.

McLeod wrote two columns for Federal Times, one in 2005 on the Federal Employees Retirement System and another in 2006 on the Thrift Savings Plan. FEBG also sponsored a benefits seminar that was hosted by Federal Times in 2005.

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