The Wisconsin plaintiff's case, which the KCBD Investigates Team tracked down and obtained, offers a stark look at how Ferrum Capital operated at the height of its scheme. According to court documents, the plaintiff invested in promissory notes — essentially IOUs promising future repayment — that were issued by a Ferrum Capital entity. The lawsuit alleges that the elderly investor, already vulnerable due to his recent stroke and cognitive struggles, was induced to commit life-altering sums of money based on representations he could not fully evaluate.
The year stood out as a high-velocity capital acquisition phase for the scheme. For example, court records highlighted that a single out-of-state investor from Wisconsin—who was recovering from a stroke and experiencing cognitive difficulties—was induced to inject $1 million in January 2021 and an additional $1 million in June 2021 into promissory notes issued by Ferrum Capital. This aggressive out-of-state expansion pushed the scope of the fraud far beyond Texas borders, pulling in victims from California, Florida, and Maryland. The Illusion: "Guaranteed" Returns and False Collateral
Investors were told their money was "secured by collateral," a claim that was allegedly false.
The represents one of the most significant financial fraud investigations in recent Texas history, involving a web of unregistered securities, deceptive marketing, and an alleged multi-million dollar Ponzi scheme . Originating from investment activities that spiked heavily in 2021 , the fallout has triggered a massive wave of civil class-action lawsuits, federal regulatory actions, corporate bankruptcies, and severe federal criminal indictments. ferrum capital lawsuit 2021
: Brooklynn Chandler Willy pleaded guilty in March 2026 to ten federal charges, including securities fraud. Investor Impact & Recovery
Instead of deploying the capital into legitimate debt collection or commercial lending, Willie allegedly used the 2021 funds for her own purposes. The Department of Justice (DOJ) noted that this money went toward paying off credit cards, funding other businesses she owned, and executing payments to older investors in classic Ponzi scheme fashion. The Collapse and the Civil Lawsuits
In a significant development, a bankruptcy judge has ruled that the promissory notes sold by Ferrum Capital and its entities are securities that were required to be registered, and that neither Cox nor Allen nor Willy nor their companies held the necessary permit for sale. As a result, Cox cannot discharge his debt against the roughly 80 plaintiffs suing him for more than $21 million. The Wisconsin plaintiff's case, which the KCBD Investigates
: In May 2021, Willy allegedly advised clients to invest $500,000 into a new Ferrum entity.
This article explores the details of the Ferrum Capital lawsuits, the key players involved, the allegations of fraud, and the ongoing efforts to recover funds for hundreds of victims. What Was Ferrum Capital?
Beginning around 2018, Ferrum Capital and its related entities (Ferrum II, III, and IV) solicited investments by promising over four-year periods. The year stood out as a high-velocity capital
In the high-stakes world of commercial finance and litigation funding, disputes often arise that never make it to mainstream headlines. However, for those involved in the fintech, lending, and legal funding sectors, the became a landmark case study in aggressive contract enforcement, allegations of bad faith, and the complexities of third-party litigation financing.
Investors and analysts noted that the Ferrum situation underscored a specific risk in the "Regulation D" (Reg D) private placement market: information asymmetry. While firms are required to file forms with the SEC when raising capital, the details of loan defaults and internal disputes often remain hidden from smaller investors until the situation has deteriorated significantly.
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[ Retail Investors ] │ ▼ (Promissory Notes: 8%–10% Return) [ Ferrum Capital LLC ] (Allen & Cox) <─── (Radio Ads & Promos) ─── [ Brooklynn Chandler Willy ] │ ▼ (Master Loan Agreement) [ Collins Asset Group (CAG) ] ───► (Purchased Distressed Debt Portfolios)
Investors alleged that they had entrusted large sums of money to Ferrum Capital to fund specific loans or to act as capital for the company’s lending operations. The lawsuit claimed that instead of using these funds for the intended real estate deals, Ferrum used the money to pay off earlier investors or to cover internal overhead expenses—a classic hallmark of a Ponzi scheme.