Joshua Allen and Michael Cox watched on Zoom as their attorneys and federal prosecutors debated final details before the men go on trial Monday morning in San Antonio.
The pair who founded Lubbock-based Ferrum Capital are charged with four counts in a federal indictment:
Conspiracy to Commit Wire Fraud
Conspiracy to Commit Money Laundering
Conspiracy to Launder Monetary Instruments
Securities Fraud
In a pre-trial hearing lasting a little longer than two hours in front of U.S District Judge Fred Biery, attorneys for Allen and Cox were unsuccessful in getting the fourth count of Securities Fraud thrown out.
Also discussed:
Whether co-conspirators could be mentioned in front of a jury
Questioning use of expert witnesses.
Witness lists
How Allen’s attorneys can show their clients acted in “good faith” when the phrase cannot be entered in court.
How the indictment could be read to a jury.
If prosecutors should be allowed to have more than 40 people who invested in Ferrum Capital testify.
Fourth count
Defense attorneys argued the indictment’s Securities Fraud count should not be allowed saying the grand jury was given the wrong legal standard for the difference between promissory notes and investment contracts, saying this violated the defendants’ Fifth Amendment rights.
Biery asked Joseph Blackwell, assistant United States attorney, if he wanted to comment. Blackwell said he’d offer a “robust response,” adding the defense was “completely wrong.”
He brought up the Howey test – a legal standard established by the Supreme Court in 1946 to determine if a financial transaction qualified as an investment contract if it meets all four of the following – investment of money, common enterprise, expectation of profits, efforts of others.
“Investment can be a note, it can be an investment contract,” Blackwell said.
Greg White of Dallas Law Firm Gray Reed, representing Allen, reiterated the grand jury was told they were promissory notes and not told they were investment contracts.
Biery denied the motion.
‘Co-conspirators’
The defense asked to “prevent any alleged co-conspirator statements,” hearsay or testimonial statements.
Those would include testimony from Brooklynn Chandler Willy – Ferrum’s San Antonio affiliate who pleaded guilty earlier this year – and an interview Cox did with the Texas State Securities Board. Blackwell said he had a recording of Cox’s interview but was not planning on using it unless Cox took the stand.
Biery denied the motion but cautioned Blackwell to be careful.
🔗 Ongoing Ferrum Capital Coverage
Government’s expert witness
Defense objected to Greta Cantwell, an enforcement attorney with the Texas State Securities Board being used as an expert witness for the prosecution – concerned if she could be fair because she works for the government.
Blackwell discussed having her testify only to the facts she knows from working on the Ferrum case.
Blackwell said he could then bring Cantwell back for other testimony he felt was relevant beyond facts of the case.
Anthony Box of Gray Reed, also representing Allen, protested, saying having Cantwell testify twice would create confusion, but Biery denied the motion.
Allen’s expert witness
Attorneys for Allen filed a motion Friday about having Alicia Alvarez testify during the trial about her analysis of the sources and uses of funds, investor proceeds, investor repayments, third-party investment activity, commissions and distributions and transfers involving Allen, Cox and Willy.
Alvarez was a supervisory forensic accountant for the FBI.
Blackwell was concerned this was being filed days before the trial, saying it was “extreme late notice.”
The motion also said 100 percent of investor funds went to Collins Asset Group, then “CAG failed to meet its financial obligations to Ferrum Capital, which resulted in Ferrum Capital being unable to repay loans to its promissory note holders.”
Cox witness list
Two women expected to testify as character witnesses for Cox were Ferrum employees and investors. Blackwell did not object to the list but said he could ask them questions.
Michael Gross, a San Antonio attorney representing Cox, said Blackwell should not ask them about allegations to make it sound like facts.
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Good faith
Eddie Mendoza, also representing Allen through his Dallas firm Mendoza Defense, was concerned Biery’s ruling Thursday on “good faith” could impact his effort to represent Allen.
“Defendants Joshua Allen and Michael Cox are precluded from introducing evidence or argument concerning advice of legal counsel or their good faith belief without first alerting the Court so an evidentiary ruling may be held at that time,” the motion said.
“I want to show the defendants were acting in good faith without using that term and running afoul of the court’s order,” Mendoza said.
Blackwell then brought up the Samuel Bankman-Fried case – the American businessman who founded a cryptocurrency exchange and was convicted for his role in a multibillion-dollar fraud scheme.
“He was justified … because he believed it would all work. The court said no,” he said, adding maybe the defendants thought it would work out and no one would be harmed. “That’s not a defense.”
Mendoza said, “I never indicated that was our defense.”
The judge then said, “I infer to get into all of that means Mr. Cox and Mr. Allen testifying.” Defense attorneys then said no decision had been made yet about the pair taking the stand.
Reading indictment to the jury
Box was concerned about how the indictment would be read to the jury.
“We don’t want the jury to be prejudiced by the horrible things the prosecution says about them,” Box said.
Part of the indictment said:
“Allen, Cox, Willy and other acting at their direction, lied and misled investors concerning the nature of the investments into the Ferrum Entities, lied about their high commissions, lied and misled about the collateral securing the investments and lied and misled about the security of the investments. Allen, Cox and Willy routinely told investors their money was safe, secure, and collateralized. In truth, much of the victims’ money was never invested but went to the benefit of Allen, Cox and Willy, or paid to other investors. Allen even told one victim it would take ‘Jesus coming back’ for there to be a problem with his investment into Ferrum Capital.”
Biery pointed out the indictment is an allegation and also said, “Does Jesus get to object being in the indictment?”
He also said he expected Blackwell would include much of the indictment language in his opening arguments.
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Judge denies Allen’s request to push back criminal trial set for August 10
July 2, 2026
No plea deal and none expected in Ferrum case as Allen seeks delay and prosecutors balk
June 19, 2026
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Ferrum Capital investors have until September 3 to file a claim — here’s how
June 4, 2026
June 1, 2026
Collection efforts against Joshua Allen in Walk-On’s case successfully completed
May 15, 2026
May 13, 2026
Ferrum victims may have one place to file claims if judge approves at May 19 court hearing
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April 13, 2026
March 23, 2026
March 19, 2026
Feds update charges against Willy in Lubbock-based Ferrum Capital case, could take her assets
March 4, 2026
February 4, 2026
Josh Allen may lose companies as one impact from receivers working on Walk-On’s, Ferrum cases
November 25, 2025
November 21, 2025
November 7, 2025
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Ferrum criminal trial – Allen, Cox and Willy – pushed back until next year
September 5, 2025
Ferrum detour to Delaware ends; what that means for victims in Lubbock, San Antonio
July 29, 2025
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‘Finally … in shackles’ – Ferrum victims ‘ecstatic’ about criminal charges against Allen and Cox
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Attorneys trying to recover money in Ferrum cases concerned about legal processes moving to Delaware
June 13, 2025
Number of government witnesses
Mendoza questioned if it’s fair for the government to call more than 40 witnesses saying the same thing and if it would sway the jury on pure volume.
Biery also pointed out it could backfire if the jury got tired of it.
Some are married, Mendoza said, building his argument against unneeded repetition.
Blackwell said he intended to cut a few.
“But this is a massive fraud and touched people in different ways. There are 560 potential victims and it shows the scope is massive and through different investment structures. It limits the United States’ ability to try the case,” he said, adding he plans to show the “full scope of criminal conduct.”
Mendoza responded, “They haven’t proven it and what I haven’t heard is why the government needs 43 witnesses.”
Biery said if it becomes repetitive, he’ll consider the defense concern.
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