US court orders Australian to pay $32 million for Forex trading fraud
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 […]
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.
“The court found in its final judgment that the defendants’ ongoing failure to offer any colorable defense to the CFTC’s claims, along with the defendants’ rehashed excuses for their continued failure to comply with the court’s orders throughout the litigation, animate the CFTC’s default-judgment arguments and underlie the court’s conclusion that default judgment is warranted”, the order stated, as the court also granted the CFTC’s motion for sanctions arising from the defendants’ contempt.
The CFTC’s enforcement action in 2019 charged the defendants with fraudulent solicitation, misappropriation, and registration violations.
The regulator alleged that from December 2017 through the present, Mr. Saffron fraudulently solicited and accepted at least $15,815,967 worth of Bitcoin and U.S. dollars from at least 179 individuals to trade off-exchange binary options on foreign currencies (forex) and cryptocurrency pairs, among other things.
His firm, Circle Society, was claimed to operate a commodity pool that guaranteed rates of return up to 300%.
Instead, the defendants misappropriated funds, including by holding participants’ funds in Saffron’s personal electronic cryptocurrency wallet as well as repaying funds to investors in a classic Ponzi scheme.
This is the third financial fraud case involving a Ponzi scheme coming to an end this week.
Yesterday, 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.
Also this week, 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.
