BALTIMORE -- Three men are facing charges in what federal prosecutors describe as a $364 million Ponzi scheme that entrapped more than 400 victims nationwide.

U.S. Attorney Robert Hur announced at a news conference Wednesday that 53-year-old Kevin Merrill of Towson, 54-year-old Jay Ledford of Westlake, Texas, and Las Vegas, and 28-year-old Cameron Jezierski of Fort Worth, Texas, have been arrested and charged with conspiracy, wire fraud, identity theft and money laundering.

The indictment alleges that Merrill and Ledford invited people to buy so-called consumer debt portfolios and falsely represented that they'd profit from debt payments and flipping portfolios. Prosecutors say "proceeds" paid out came from other investors, not collections or sales, as represented. They say the trio concealed their diversion of $73 million and bought homes, automobiles, jewelry and gambled $25 million.

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"Most of these investors are just learning that they have been victimized. The effects of this kind of fraud can be devastating," Hur said in a statement.

Consumer debt portfolios consist of defaulted credit card, car, student and other loans that are then sold to third parties, which try to collect on the obligations.

If convicted, three men face a maximum of 20 years in prison for wire fraud, as well as 20 years for money laundering and two years for identity theft.