FAYETTEVILLE – Two men convicted of defrauding investors in a failed Elm Springs wind farm project and the development of a wind turbine that was never built were sentenced to federal prison and ordered to pay more than $1.1 million in restitution Tuesday.
Jody Douglas Davis and Phillip Vincent Ridings were charged with nine counts of wire fraud, aiding and abetting wire fraud, money laundering, and aiding and abetting money laundering. A federal jury found both men guilty on all counts Sept. 3. The jury deliberated about three hours over two days before reaching a verdict.
Both Ridings, who conceived of the wind turbine, and Davis, Dragonfly’s CEO, were found guilty of conspiring to commit wire fraud. Both were also found guilty of four counts of wire fraud and aiding and abetting wire fraud.
Both men were also found guilty, jointly, of two counts of money laundering, and both were found guilty individually of another count each.
U.S. District Judge Timothy L. Brooks sentenced Ridings, 64, of North Little Rock to eight years in prison, which was the lower end of the federal sentencing guideline range. He must report to prison by April 20.
Later Tuesday, Brooks sentenced Davis, 47, of Searcy to 15 years in prison, which was an upward departure from the sentencing guidelines. Davis was immediately taken into custody by U.S. Marshals.
“You were the business guy. Your role was to con people out of their money,” Brooks said. “You had to have known you were committing a horrible crime when you were sitting around splitting up the money.”
Brooks ordered both men to jointly pay more than $1,138,848 in restitution but no fines.
Davis got more prison time because of his criminal history and because Brooks found him to be the more culpable of the two. Davis was still on probation for wire fraud and money laundering in Oklahoma when the wind farm scam began.
Ridings had no prior criminal history and paid more than $12,000 in restitution before sentencing.
Brooks had strong words for both men, saying neither accepted responsibility for their actions, but came down especially hard on Davis who he said not only defrauded friends but also continually took advantage of the religious faith of those he scammed. The judge called that “particularly evil.”
“Part of the con was to prey on the faith of other people, and I find that particularly egregious,” Brooks said. “While you were doing that, you knew it was a scam.”
Davis repeatedly lied to the jury during the trial in an unsuccessful bid to con the jury, Brooks said.
“You and I both know you took an oath and you lied,” Brooks said. “You’re a con man’s con man. That’s just who you are.”
Brooks repeatedly scolded Ridings for apparently still believing his wind turbine would work with a little more time and money.
“Mr. Ridings, you seem to be driven by something that makes you believe you can defy the laws of physics,” Brooks said. “The way you led on investors, you may still be planning to pursue this idea and raise money off of it, from what I’ve seen here today.”
Brooks noted the scam lasted at least five years and there were 14 victims.
“You got people to part with their hard-earned money while you were playing inventor with a con man,” Brooks told Ridings. “You can’t lie to people and take their money.”
Brooks said Ridings took his cut as money came through the door.
“You were getting thousands of dollars and you were just divvying it up,” Brooks said. “You made a fool of all these people.”
A federal grand jury in 2019 handed down a nine-count indictment against Davis and Ridings.
Davis and Ridings intentionally misled investors in the wind farm project about the financial viability of the project and potential returns on investment, according to the indictment.
Specifically, they told investors they developed cutting-edge wind turbine technology, a prototype was being developed, companies were lining up to buy it and a $10 million federal grant was imminent, the indictment says.
None of it was true.
“Mr. Davis and Mr. Ridings callously defrauded members of our community through a fictional investment opportunity,” said James A. Dawson, FBI Little Rock special agent in charge. “Even after being federally indicted, these men continued to advance their criminal scheme through blatant falsehoods and deceit. Today’s sentencings send a clear message to other fraudsters: preying upon our Arkansas communities will not stand.”
A third man, Cody Fell, who is Davis’ brother-in-law and worked at Dragonfly for a time, pleaded guilty to federal wire-fraud and tax-evasion charges in December 2018. Fell agreed to cooperate with the government and testified he was given more than $100,000 of investors’ money by Davis and Ridings.
Brooks sentenced Fell in September to 10 months in federal prison, followed by three years of supervised release and ordered Fell to pay $422,330 restitution.
Fell was also ordered to pay the IRS restitution of $30,185 and was ordered to file proper income tax returns in the future.
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