Two Americans and a Dutch national indicted for $30 million Forex trading scheme
According to court documents, the defendants told victims they would trade their funds using an online trading platform, IB Capital, provided by the third defendant, Dutch citizen Emade Echadi.
Two U.S. citizens and a Dutch national were charged with conducting a foreign exchange trading scheme to steal $30 million from their investor victims.
A federal grand jury in the Southern District of Florida returned an indictment last Thursday. An indictment is an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The defendants are charged with conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering.
The indictment alleges Patrick Gallagher, 44, and Michael Dion, 49, have solicited victims to invest in their foreign exchange company, Global Forex Management, by promising them large returns based on fabricated prior trading results.
According to court documents, the defendants told victims they would trade their funds using an online trading platform, IB Capital, provided by the third defendant, Dutch citizen Emade Echadi.
Instead, the three were working together to steal the victim investors’ money. In May 2012, they intentionally created losing trades for the investors and stole $30 million from their victims.
The defendants then allegedly concealed the scheme from victims by creating fraudulent trading records and then routed the stolen money through shell companies they had set up all over the world.
It seems that all the effort to lay low after the $30 million fraud was insufficient. If convicted, the defendants face a maximum penalty of five years in prison for conspiracy to commit securities fraud and 20 years in prison for each of the other charges.
The DoJ and the US financial watchdogs have been extremely active in cases involving financial crimes. Last week, FinanceFeeds covered three court decisions regarding Ponzi schemes.
The U.S. District Court for the District of New Mexico has ordered Douglas Lien to pay more than $10.3 million in monetary sanctions and relief for a futures trading fraud that lasted nearly 20 years.
In a classic Ponzi scheme, Mr. Lien misappropriated client money intended for futures trading and issued false account statements to conceal his fraud.
Besides permanent trading and registration bans from the CFTC, the order requires the restitution of $5,195,679 and a civil penalty of $5,195,679. The CFTC warned victims that they might never see their money again.
Former Georgia state legislator Clarence Dean Alford has been ordered to disgorge ill-gotten gains of $8,849,653 with prejudgment interest of $1,751,085 and to pay a civil penalty of $192,768.
The United States District Court for the Northern District of Georgia imposed restitution, interest, and penalties, based on a complaint filed by the SEC.
The SEC alleged that from 2017 to 2019, Mr. Alford, who was the CEO, President, and co-managing member of Allied Energy Services, LLC, fraudulently induced at least 100 investors to invest at least $23 million in unregistered, high-yield promissory notes purportedly issued by Allied.
The SEC found that Mr. Alford actually used the investor funds to pay personal expenses, including construction costs associated with a multi-million dollar home, and to make interest payments to earlier investors in order to keep the Ponzi scheme running.
The U.S. District Court for the District of Nevada has entered a default judgment against defendants David Gilbert Saffron and his firm Circle Society for a cryptocurrency fraud and misappropriation scheme.
The Australian citizen residing in Las Vegas and his firm were ordered by the court to pay restitution of $14,841,280 to victims, disgorgement of $15,815,967, and a civil monetary penalty of $1,484,128.
