When Kenneth Wayne McLeod held a gun to his head and ended his life, it left a single bullet hole in the driver’s side window of his Hummer.
The dark tint of the black sport utility vehicle’s window held the shattered glass together. The film was like the lies the 48-year-old Jacksonville financial adviser hid behind for years, a slick facade that kept investors in his fraudulent bond fund unaware until a convergence of forces pushed the truth from the shadows.
Since his June suicide, his family and many of his closest associates have declined offers to talk about his life. But interviews with dozens of others and public records revealed a lot about the man behind a Ponzi scheme of at least $34 million. They depict a man who developed the cunning of an undercover cop, the swagger of a millionaire playboy and the street smarts of a wise guy as he built his bankroll off the backs of federal employees.
As a young newlywed mired in bankruptcy, McLeod found himself broke. But like his lies, once he got some money, he knew how to spread it around to his advantage. He had a reputation for being the biggest tipper, the fastest to pick up a country club bar tab. He lavished all-expenses-paid Super Bowl trips on groups of friends year after year.
Among McLeod’s whoppers was that he had worked as an undercover federal agent. Sometimes he flashed a badge, posing as a cop as he was ripping off real ones. He said he came from Georgia Vidalia onion money, and that the New York Mets drafted him out of the University of Georgia. In the end, the husband and father of five left behind many questions for both loved ones and victims, some of them law-enforcement retirees who lost their life savings.
The Securities and Exchange Commission says McLeod ripped off about 260 investors nationwide, claiming at least once that his special fund was for the families of fallen law-enforcement agents.
He met clients through retirement planning seminars that federal and state agencies paid him for, soliciting folks to roll over their retirement accounts for him to manage through his company F&S Asset Management Group. With the phony fund through the separate company he called Federal Employee Benefits Group, authorities say McLeod funneled money from new investors to pay the interest and principals on old accounts and to support his big-spender lifestyle.
But there were few signs of trouble until shortly before the crack of McLeod’s gunshot interrupted the morning calm on June 22 in Jacksonville’s Mandarin Park. Landscaper Rick Cason drove toward the noise, thinking the driver of the Hummer with oversized tires and flashy chrome rims could be a robbery victim.
“He looked like he had a lot of money. That’s what shocked me,” Cason said later. “… How bad could life be for someone with all that money?”
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While the money came later, McLeod was stocked with charisma by the time he went to Nathan B. Forrest High School on Jacksonville’s Westside. He ran cross-country, played soccer and baseball, and suited up in jersey No. 32 for the varsity football team. The student with the bushy halo of brown curls and toothy grin was president of the Pheta service club, a group immortalized in the Class of 1980’s yearbook as “The Wild and Crazy Guys of Forrest.”
Former classmate Brenda Vento called him a popular, handsome guy who hung with a group “who were into some mischievous stuff, but nothing bad.”
“Just showing off, attempting to get attention,” she said.
“He could sell you on anything,” fellow alum Kim Butler said of his charm.
After graduation, McLeod started working for Prudential Insurance Co. in Jacksonville. Years later, McLeod would tell a U.S. Drug Enforcement Administration client his father worked at Prudential and helped get him the job. McLeod said the DEA had picked him for an agent recruit class but a federal hiring freeze nixed it.
By 1985, McLeod listed his profession as an insurance underwriter. Records at Florida State College at Jacksonville show he had earned a certification in a 40-hour insurance course by then. But records don’t support his claims to others later that he graduated from the University of Georgia. An official there said he never was a student.
McLeod said in later court papers he was studying at The American College and nearly had a “BA in business,” but a spokesman for the Philadelphia-area distance learning institute said he never finished any courses there and the school doesn’t offer bachelor’s degrees.
But if McLeod could talk big, he also could think big and spend big.
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By McLeod’s account in legal records, in August 1987 he founded FEBG. He broke away from Prudential for the first time that same month, taking on insurance work for companies in Pennsylvania and North Carolina.
That September, he married his first wife, Sheila. They had four children together, but also money troubles. Federal court records show McLeod filed for bankruptcy a month after their wedding. On federal income tax forms, it seemed large business expenses swallowed up his FEBG income year after year.
McLeod’s bankruptcy case ended in 1990. Five years later, so did his marriage. A Duval County judge ordered him to pay $200 weekly support to his ex-wife, a stay-at-home-mom who had primary custody of their children. He kept the washer and dryer, the still-financed Jeep Cherokee and the $3,000 big-screen TV that wasn’t paid for yet either. She kept the minivan – which also wasn’t paid off – and her grandfather’s coin collection.
But as McLeod’s marriage was falling apart, he was building FEBG. By 1995, he’d taken on insurance work for nine other companies around the country. He had rejoined Prudential in 1993, while continuing to run his business.
He resigned before the divorce was final, saying his boss told him to choose between the two companies because of a regulatory crackdown. Divorce file notes show McLeod’s boss thought he was using FEBG as a tool to reach government employees who would buy Prudential products, but didn’t know McLeod was making other sales on the side.
McLeod said he had 600 clients through FEBG, including 550 out-of-state, and made between $25,000 and $30,000 a year.
The divorce case judge agreed sales through McLeod’s corporation were in violation of SEC rules since he also worked for Prudential.
“The husband felt that he could make more money through his corporation than with Prudential once he gets ‘on a roll,’” the judge’s ruling said.
It didn’t take long for that to happen.
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A couple of years after his divorce, McLeod’s high-roller mentality was starting to yield dividends.
In 1997, he bought a nearly 3,000-square-foot brick house inside a gated development a few blocks from The Ritz-Carlton and The Golf Club of Amelia Island. The investment wasn’t lost on his ex-wife. In 1998, she persuaded a judge to more than double McLeod’s support payments.
A financial affidavit said McLeod was earning $7,200 a month as a self-employed financial adviser and benefit consultant. On top of other bills, he had about $40,000 in Internal Revenue Service debt. But his company’s business model was getting attention.
That same year, McLeod settled a federal contract dispute case with three Missouri companies out of court. He had signed a deal to train their reps and delivered retirement-planning booklets he had written for federal workers. But the businesses scrapped the deal, saying later in court papers that they paid McLeod about $300,000.
“I hope you … are ready to accept the wrath of the federal agencies if you attempt to cut me and my company out of the delivery process,” McLeod wrote to one of their executives at the time.
Curtis Fallgatter, a former federal prosecutor who represented McLeod in the case, said his client surrounded himself with people in the law-enforcement profession who had a lot of credibility.
But there was no doubt about McLeod’s style. Tom Luke met McLeod playing golf on Amelia Island years ago.
“Wayne had to be the star of the show, but you really didn’t think anything about it. … It was always jovial.”
If money and image were important to McLeod, there were signs that his sense of reality involving both were warping. Somewhere along the way, he went from surrounding himself with law-enforcement officials to pretending he was one of them.
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Unlike what McLeod told some people and hinted to others, public information officials for the DEA, FBI, and U.S. Immigration and Customs Enforcement said McLeod never worked as a federal agent.
“He never made that claim with me. Wayne wasn’t going to bull– me and he knew it,” said Mike Braun, who was DEA’s chief of operations in charge of the agency’s 227 domestic and 87 foreign offices before his retirement.
But Braun did take McLeod’s investment advice and introduced him to at least one person who lost money in the scam. Braun called McLeod “a bit of a braggart,” something that apparently helped the investor fool others. David Lamm, host of a Jacksonville sports radio show that McLeod advertised his business on, was one of them.
“He told me he’d done undercover work. That’s why he had all of those tattoos,” Lamm said.
Former government officials who were on McLeod’s payroll included a retired assistant special agent in charge of the DEA in Tampa, a former ICE administrator in Jacksonville, a former DEA agent from South Florida and an ex-Secret Service official.
A government website shows that since 2005, federal agencies paid McLeod nearly $203,000 to put on seminars. The Department of Homeland Security, IRS and Department of Veterans Affairs were among agencies that awarded McLeod contracts.
Nassau County Sheriff Tommy Seagraves said he met McLeod through a friend and golfed with him recently. The sheriff said McLeod told him he taught DEA asset forfeiture training classes, was a UGa grad, and was raising small children because his wife was sick or had died.
“He acted like he was better than me as a person,” Seagraves said.
But if McLeod put on airs, he never hesitated to reach into his wallet to put his money where his mouth was.
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“If you were to ask me, even a year ago, who was the wealthiest member of San Jose Country Club, I would have said Wayne McLeod,” said Tony Draper, who once was on the Jacksonville club’s golf cart staff.
In 2002, McLeod bought a $626,900 home in St. Augustine with his second wife, Susan. After remarrying two years earlier – he was 38, she was 23 – he’d also become a father again. In 2004, the couple upgraded to a $1.48 million waterfront house in the Julington Creek section of St. Johns County. He zipped around in a 38-foot boat named Top Dawg.
McLeod also got a rep as the best tipper at San Jose Country Club.
“We would see his name on the tee sheet and get excited and look for his big black Hummer,” Draper said.
McLeod told him he was a martial artist with a black belt. He also said the Mets drafted him out of UGa, but he blew out his knee.
While the Mets organization says that wasn’t the case, Draper said he was happy to listen at the time. McLeod was tipping staffers $20 to load his clubs on a cart, and another $20 to clean them later.
McLeod, who had a UGa golf bag and club heads, also gave Draper tickets to the school’s football game against Georgia Tech after it came up that he never could get tickets.
At Baxter’s Restaurant, a steakhouse near McLeod’s Amelia Island home, the staff knew him as a man who tipped well, got loud after a few Coors Lights or vodka and cranberry cocktails, and mostly ordered chicken.
But country club and restaurant tips didn’t compare with McLeod’s Super Bowl spending.
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When the event came to Jacksonville in 2005, McLeod met event planning specialist Bob Barnes. He arranged trips for McLeod and up to two dozen friends to go to the next five Super Bowls. Each time, McLeod picked up tabs ranging from about $100,000 to $200,000.
Barnes said he never knew McLeod’s occupation but understood he had some type of law-enforcement affiliation because he’d seen him pull out a badge while introducing himself. He said he arranged for game tickets, hotel rooms, and sometimes transportation, calling McLeod “a bit of a control freak” who designed down-to-the-minute itineraries for his guests.
On top of other spending, SEC records show McLeod forked over $645,000 for suites at Jacksonville Jaguars games from 2005 to 2009. McLeod also was spreading money around Amelia Island, where he liked to ride around on a red, street-legal golf cart with a Bulldogs logo.
From records, it appears that in 2009, he bought two Fernandina Beach condos in partnership with John Price, manager at the Amelia Island golf club. That year, he also paid $610,000 for land beside an industrial park on Jacksonville’s Northside. In March, McLeod’s F&S Asset Management Group sponsored a Hooters pro golf tour event on Amelia Island. He told the event’s organizer he also sponsored some pro golfers from the area.
At the Amelia country club, he told some members he was a retired undercover DEA agent from Georgia’s Vidalia onion money – the latter of which the farming interest said isn’t the case.
But McLeod inspired loyalty in some friends, including Jacksonville man Steve Newmans. A friend for 20 years, Newmans said McLeod often paid his fees when they golfed since he started collecting disability a few years ago.
“He’d say ‘Man, you ain’t got no money. Don’t worry about it.’ … He’s the kind of guy you wanted to be your friend because you could trust him.”
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A recent resume for a former accountant for McLeod’s business said it had four subsidiaries and more than 50 employees. But there were some signs of a storm brewing as the company grew.
In 2006, Virginia’s Bureau of Financial Institutions rejected McLeod’s application for a mortgage broker business license, saying there were doubts his company would operate efficiently, fairly and legally. While some of McLeod’s clients continued to make money, at least one warned law-enforcement superiors about dealings he found shady.
That summer, now-retired Customs agent Shawn Knickerbocker and his wife visited McLeod’s downtown Jacksonville office. All kinds of law-enforcement paraphernalia covered the walls, along with a photo of George W. Bush.
Prior to that, Knickerbocker had given McLeod $80,000 to invest, money he said remains safely invested now. But he lost trust in McLeod later.
During the 2006 office visit, the couple gave McLeod $247,000 toward a house loan, with McLeod promising interest wouldn’t be more than $2,100 a month. When paperwork later showed loan interest at $3,600, Knickerbocker threatened to go to the SEC.
McLeod eventually refunded the money with 8 percent interest, but Knickerbocker said Customs administrators in Jacksonville and Indianapolis ignored his warnings about McLeod. He wasn’t the only one with reservations.
Ed Liddle, a retired Detroit police officer and federal employee, invested a half-million dollars in McLeod’s F&S fund several years ago. Liddle said McLeod told him he was a former DEA agent. But Liddle pulled his money out of McLeod’s control two weeks before the investor’s suicide because McLeod had become too difficult to contact and hadn’t been making him money.
“You would think of all people, these guys, who are suspicious by their very nature, wouldn’t get sucked into this,” Liddle said of fellow law-enforcement officers. “But it’s all part of the con game.”
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Looking back, there were hints McLeod might have sensed his dangerous game gaining on him.
Luke said he’d gotten more introverted on the golf course. Lamm said while McLeod was the biggest advertiser on his radio show, he had gotten behind on payments. But McLeod was looking at paying a much bigger price.
After denials earlier in the week, on June 17, McLeod confessed the scam to SEC investigators who said an anonymous call turned authorities onto him. The next day, McLeod said in an e-mail to investors in his bogus FEBG fund that he was closing it.
“I Pray that at some point in time you can and will forgive me,” he wrote.
People who heard the fatal gunshot said police were there so fast, it was clear there was a search for McLeod. A dog walker saw a woman pull up in another dark Hummer and jump out. She was crying and hugging people who were keeping her away from McLeod’s Hummer.
Two days later, the SEC got a court order freezing the assets of FEBG, F&S Asset Management Group and McLeod’s estate.
And on June 26, about 450 people packed McLeod’s memorial service in a Mandarin funeral home’s chapel. Around 200 of them had to stand outside, dozens short of the number of different people that authorities said were victims in his scam.
One of McLeod’s children spoke during the service and the pastor of St. Joseph’s Catholic Church, where McLeod’s wife attends Mass, was the celebrant.
“God, I’m sure, has made provisions for all of us,” the Rev. Daniel Cody said later of the sermon’s theme. “We just hope that God is a forgiving God.”
