Michael K. Wallens Sr. pleaded guilty to one count of securities fraud on Oct. 19 in U.S. District Court in Dallas.
Wallens and his associates collected more than $17 million from about 180 investors who bought Collateral Secured Debt Obligations issued by W Financial Group.
Wallens falsely told investors the debt obligations were backed by a reinsurance scheme and that their money would be held in cash, government or corporate bonds.
Wallens and two associates instead spent investors' money to purchase a used car dealership Wallens owned. They also used investors' money to buy residential lots and to invest in a home-building company and a power company.
Sentencing has not been set; Wallens faces a maximum sentence of five years in prison, a fine, and restitution.