Investment firm owner who shut down benefits fund
found dead in Mandarin park

Investors are left with little more than an
apologetic e-mail about closing a fund for federal employees.

Posted: June
23, 2010 - 11:25am

If you know something

If you were a client or former employee of Wayne McLeod’s, please
contact Times-Union columnist Abel Harding at [email protected]
or (904) 359-4184.

A plea for forgiveness

McLeod startled investors with this e-mail, sent late Friday
afternoon.

Greetings Everyone...

I hope this email finds you all doing well.

After more then 20 years I have deemed it necessary to terminate the
FEBG Fund effective immediately. This process will take time so I ask
for your patience during the process.

While this decision may cause some of you a temporary hardship, it is
not my intention and I’m truly sorry from the bottom of my heart.

I also want to sincerely apologize in advance for any inconvenience
this may cause. I Pray that at some point in time you can and will
forgive me.

For those who are receiving current income via the interest payments
for the month of June and beyond, those payments have been suspended and
nothing further will be sent.

You should expect to be contacted in the coming days or weeks by the
regulators charged with this termination/task.

I have spent the vast majority of my adult life helping tens of
thousand federal employee’s become better prepared for their financial
future and I am proud of that legacy.

Respectfully,

Wayne

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By Abel
Harding

Investors in a Jacksonville-based advisory firm, whose clients
included high-ranking federal law enforcement officials, received a hint
of trouble last Friday in an e-mail from the company’s CEO.

Wayne McLeod told clients he was terminating the “FEBG Fund,” a
private investment tool that had been marketed as an investment vehicle
with spectacular returns.

Interest payments for the month of June had “been suspended” and
“nothing further [would] be sent,” wrote McLeod, CEO of the Federal
Employee Benefits Group. He went on to inform his clients that he was
praying that they would forgive him at some point in the future.

Four days later, McLeod, 48, was found dead in a Mandarin park,
apparently of a self-inflicted gunshot wound, the Jacksonville Sheriff’s
Office said.

Married and the father of six children, he owned homes in Amelia
Island and Saint Johns, a 38-foot yacht and left behind many unanswered
questions.

A spokesman with the Securities and Exchange Commission said there
was no fund registered under the name “FEBG Fund,” as is usually
required. The spokesman declined to say whether there was an ongoing
investigation of McLeod.

It is unclear what happened to the fund’s assets or how many clients
invested in the fund.

McLeod’s parents said by phone Wednesday they were looking for
answers to what happened. Their son did not seem to be in any sort of
financial or other trouble, the Jacksonville couple said.

“In other words, we’re just as much in the dark as you,” said his
mother, Frances McLeod.

His father, Billy McLeod, said he played tennis with his son about a
dozen times in the past two or three months. He said they would talk
briefly at the end of the matches, but he did not notice any stress in
his son’s life.

“He never discussed his business with us,” the elder McLeod said. “He
appeared like he was making a good living.”

The firm’s high-rise offices on Jacksonville’s Southbank, which were
adorned with numerous awards from federal law enforcement agencies, were
closed late last week, and with little notice. On Wednesday, there were
no signs of the firm’s employees, which reports say numbered as high as
28.

In a February 2009 letter bearing an ominous caution, McLeod informed
investors that the assets of “FEBG Special Fund” were not reflected in
the annual statement for their investment portfolio. He said he would be
sending a report on that fund in a separate mailing. Then, McLeod urged
his clients to use the utmost discretion and contact only him with
queries about their funds.

“I’m the only one who has access to your file and account due to the
confidentiality agreement for this fund,” McLeod wrote. “With all of the
Ponzi Scams going on around the world I wanted to ensure [sic] you that
this account is 100% secured by US Gov’t Securities and the principal
is never touched until liquidated.”

Investors who requested withdrawals from McLeod in recent weeks say
they were met with apparent agitation.

F&S Asset Management Group Inc., a company that catered to
federal employees that McLeod headed, is registered with the SEC. The
company had assets under management of $25 million, according to a 2005
filing with the agency, the latest available.

Both FEBG and F&S Asset Management Group Inc. advertised advisory
services, which included financial planning and customized asset
management services, as well as fee-based portfolio services.

Federal law enforcement officials who responded to a Times-Union
request for information about McLeod painted a portrait of a man who
worked hard to curry favor with Drug Enforcement Administration brass.

He donated heavily to the DEA’s Survivor’s Benefits Fund, displaying
numerous recognitions from the group inside his 15th-floor riverfront
offices in the Aetna building at 841 Prudential Drive. In return,
officials invited him to in-service training conferences around the
country, where he promoted both himself and his products.

For a small fee, he guided employees in allocating contributions to
their Thrift Savings Plans, the federal equivalent of a 401(k). That
initial advice, which was typically for the 5 percent contribution of an
employee’s salary — matched dollar-for-dollar by the federal government
— was McLeod’s “hook,” some investors said. He would then encourage
them to invest additional money, often up to 8 percent, with his firm.

DEA officers aren’t the only ones who heard McLeod’s pitch. Employees
of other federal agencies, including the FBI, said they had attended
McLeod’s seminars.

Flora Beal, communications director for the Florida Office of
Financial Regulation, said McLeod’s investors who need assistance with
claims should contact the office’s Division of Securities by going
online at www.flofr.com or calling (800) 848-3792.

Times-Union writer Dana Treen contributed to this report.

http://jacksonville.com/business/2010-06-23/story/questions-raised-about-jackonville-investment-firm-catered-federal