Jeffrey Ray Filla was arrested April 6 after having been indicted in Fort Bend County on securities fraud and other charges stemming from his sale of investments in Prophecy Fund LP, a commodities trading program whose collapse he tried to conceal with false financial statements and misrepresentations to investors.
According to the indictment, Filla failed to disclose that he moved a significant portion of the funds investors placed in Prophecy accounts into an unrelated business. He transferred some of the money in Prophecy accounts to Auto Direct LLC, an automobile sales lot in Rosenberg. Filla was the sole managing member of Auto Direct.
Fort Bend County Assistant District Attorney Scott Carpenter is prosecuting the case following a joint investigation with the State Securities Board and the Fort Bend County Sheriff's Office. The Fort Bend County grand jury indictment, issued March 23, also charged Filla with theft, money laundering, and misapplication of fiduciary property.
Filla, a resident of Richmond, solicited members of a church he attended in Sugar Land to invest in Prophecy. After raising money for Prophecy, Filla engaged in a number of fraudulent practices to try to convince investors that Prophecy Fund was thriving.
According to the indictment, Filla provided investors with falsified financial statements that were supposedly from an auditing firm; made distributions to one investor with funds from another investor, Ponzi style; and failed to forward investor funds to trading firms Filla said he used in operating Prophecy.
With Prophecy and Auto Direct out of money and shut down, Filla filed for bankruptcy June 17, 2014 in the Bankruptcy Court for the Southern District of Texas, Houston Division.