Los Angeles, California - The former president and CEO of the Sherman Oaks-based Morgan Peabody, Inc. brokerage and investment firm has pleaded guilty to federal wire fraud charges stemming from a real estate investment scam that resulted in about five dozen investors losing nearly $4 million.

David Williams, 54, of Studio City, a licensed securities dealer and investment adviser, pleaded guilty yesterday before United States District Judge Dale S. Fischer. Williams pleaded guilty in the midst of a jury trial to three counts of wire fraud and two counts of tax evasion.

In a plea agreement filed with the court yesterday, Williams admitted that he directed Morgan Peabody representatives to sell securities in a fund that Williams personally had created, purportedly to invest in real estate. The Sherwood Secured Investment Fund, LLC, a Studio City business that Williams owned, offered a 9 percent annual return on investments.

However, as he admitted in the plea agreement, Williams used the majority of investor money from the Sherwood Fund to pay for personal expenses, including a lease on a $6 million residence in Toluca Lake.

Between June 2007 and April 2008, Williams fraudulently obtained more than $3.75 million from approximately 60 investors as a result of the Sherwood Fund offering.

In his plea agreement, Williams admitted that he used investor money for personal purposes and committed tax evasion by failing to file returns with the IRS for tax years 2007 and 2008, and failing to report the more than $2.3 million in income he received. Williams has agreed to pay additional taxes of $777,881 for those tax years, as well as the civil fraud penalty and interest.

Williams is scheduled to be sentenced by Judge Fisher on September 28. At sentencing, Williams faces a statutory maximum sentence of 70 years in federal prison.

The investigation into Williams’ scheme was conducted by special agents with the Federal Bureau of Investigation and IRS—Criminal Investigation.