By Madilynne Medina
SFGate, San Francisco
SHASTA LAKE, Calif. — A Northern California man pleaded guilty Thursday to a Ponzi-like fraud scheme, following his arrest in 2020 where he tried to escape the FBI using a submarine in Shasta Lake, officials said.
Matthew Piercey, a 48-year-old from Palo Cedro, admitted to wire fraud, money laundering and witness tampering in the $35 million investment fraud scheme that occurred from July 2015 to August 2020 , the U.S. Attorney’s Office in the Eastern District of California said in a news release.
In the operation, Piercey scammed investors by making false statements under the guise of two investment companies, Family Wealth Legacy and Zolla, the attorney’s office said. Piercey lied to investors about an " Upvesting Fund ,” which was supposedly a successful “automated algorithmic trading fund.”
Piercey used investor money to pay other investors, the attorney’s office said, and eventually used a chiropractor business in Redding to conceal his operation and money. He gained $35 million in investment funds but paid investors only $8.8 million over the course of the scheme and spent the rest of the money on personal and business expenses, such as two residential properties and paying a criminal defense firm.
Some people invested their “life savings” in Piercey’s companies, FBI Sacramento Special Agent in Charge Sid Patel said in the news release.
Piercey eventually realized he was under investigation and tried to discourage investors and witnesses from speaking out in court, the attorney’s office said. This slowed down the court process as Piercey illegally transferred $775,000 from investors into one of his bank accounts.
When authorities tracked Piercey down on Nov. 16, 2020, and attempted to arrest him, he led them on a vehicle chase through nearby neighborhoods and on a highway, the attorney’s office said. Piercey then left his vehicle and tried to escape into Shasta Lake using an “underwater submersible device,” hiding underwater for about 20 minutes before being taken into custody.
While in jail, Piercey used a coded language to speak with visitors, the attorney’s office said, directing them to a U-Haul storage locker in Redding he had rented under a fake name. When the FBI searched the locker, agents found a wig and 31,000 in Swiss francs (around $37,000).
Piercey is scheduled to be sentenced Sept. 4 and could face up to 20 years in prison for each count of fraud and at least $1 million in fines.
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