Jackson, TN – Former State Representative Cecil Ray Davis was sentenced today by United States District Court Judge James D. Todd to fifty-seven months in prison and two years supervised release as a result of his conviction for mail fraud. In addition to serving the prison time, Davis was ordered to pay $10,398,340.27 in restitution to his victims.

The sentence resulted from Davis’ January 19, 2007 guilty plea to a Ponzi scheme that he devised to defraud investors in various business ventures. The Ponzi scheme, named after a 1920's case involving Charles Ponzi, is a fraudulent arrangement in which lenders or participants were attracted by the lure of exorbitant profits.  Ray Davis, as in Charles Ponzi’s case, was making payments of seemingly large profits to early lenders from monies obtained from later lenders, rather than from “profits” or “commissions” earned by the underlying business ventures.  Davis used these payments to early lenders to attract later lenders and to conceal the scheme to defraud.

The investigation was conducted by the Federal Bureau of Investigation with Greg Peacock as lead agent and the United States Postal Inspection Service with Thomas Terry as lead agent. Assistant United States Attorney Victor L. Ivy prosecuted the case for the Government.

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