June Ends With MULTIPLE Fraud Filings By CFTC; Air-Traffic Controllers Who Allegedly Solicited Colleagues Into Fraud Scheme Charged In Georgia; Investigators Link Georgia Scheme To Alleged Botfly Caper In Florida, Saying Federal Aviation Administration Employees Became Investors
EDITOR’S NOTE: The disturbing information that follows this intro is presented largely in capsule form, with links to CFTC charging documents in three new cases. Perhaps the most notable case in this summary is the one filed in Georgia. As things stand, it demonstrates:
Interconnectivity: Ties between and among scams and scammers are common in the fraud universe, contributing to a condition the PP Blog has described as “fraud creep.” The CFTC says two of the defendants charged in the Georgia case were investors in Botfly LLC, an alleged Ponzi scheme that operated internationally from Florida. The Botfly case is just plain creepy. Elements of it are reminiscent of the AdSurfDaily case. ASD, too, was based in Florida.
Familiarity/Affinity: Two of the Georgia defendants are employees of the U.S. government — specifically air-traffic controllers employed by the Federal Aviation Administration (FAA). Based on court filings, it appears as though the FAA employees were moonlighting as Forex managers and that other FAA employees got sucked into one or more scams.
Vulnerability: Can anybody be truly safe in this unprecedented era of white-collar crime and rampant hucksterism? Government employees allegedly got sucked into a Ponzi caper operated by Kenneth “Wayne” McLeod, a Florida man who reportedly killed himself last year after the SEC opened a probe. If the allegations by the CFTC in the Georgia case are true, it may mean that other government workers saw their wealth eviscerated in a fraud scheme. It is unclear if retirement savings were plowed into the alleged Georgia scam. What is clear, however, is that the U.S. government now has at least two cases on its books in which it is alleged that federal workers were drafted into fraud schemes by individuals either employed by the government or paid by the government.
We are presenting summaries because the information is voluminous. Here, now, the capsules . . .
In an extraordinary series of actions on the Ponzi and fraud front, the CFTC has closed out the month of June by filings fraud cases in federal courts in Georgia, Colorado and Nebraska.
Charged civilly with fraud and misappropriation in the Georgia case were Louis J. Giddens Jr. of Fayetteville, Ga., and Anthony W. Dutton of Peachtree City, Ga. Giddens and Dutton are air-traffic controllers, the CFTC said.
Also charged in the Georgia case was Michael Gomez of Valrico, Fla. Gomez is a commodity trader, the CFTC said.
The men are charged with operating a Forex fraud scheme that gathered about $1.4 million and involved at least four companies: Currency Management Group LLC, Pinnacle Capital Partners LLC, Pinnacle Trade Group LLC and Elyon LLC.
Giddens, the CFTC said, was an air-traffic controller in Atlanta. In “late 2008,” according to the CFTC, he learned about Botfly LLC, a Florida Forex company that offered investors a return of 10 percent a month.
After meeting with a “principal” of Botfly, Giddens became a Botfly investor and solicited fellow Federal Aviation Administration (FAA) employees in Georgia to become Botfly investors, the CFTC charged.
Dutton, Giddens’ fellow air-traffic controller, became a Botfly investor, the CFTC said. So did other FAA employees.
In April 2010, the state of Florida charged Botfly in a Ponzi case and froze its assets.
Giddens and Dutton used essentially the same business model as Botfly, and started their own pooled Foex business, using their unregistered companies to do so, the CFTC charged.
Eventually, Gomez, who also was unregistered, became part of the mix, the CFTC charged.
Investors plowed $1.4 million into the fraud scheme, the CFTC charged.
Read the Georgia charging document.
Shawon McClung of Denver and Flint-McClung Capital LLC (FMC) of Englewood, Colo., have been charged civilly with fraud and misappropriation in an alleged $1.9 million Forex Ponzi scheme.
The scheme operated in part through a website, and McClung positioned himself and the company as “sophisticated” players with a cash reserve of nearly $100 million.
Investors were told their funds were “guaranteed” against loss, the CFTC charged.
Prospects were lured “with the prospect of quickly making large profits with returns such as 50 percent in thirty days or 15 percent per month for six months,” the CFTC charged.
McClung “has never been registered” with the CFTC, the agency charged, adding the FMC also “has never been registered.”
Read the Colorado charging document.
Grace Elizabeth Reisinger of Grand Island, Neb., and ROF Consulting LLC (ROF) have been charged civilly with operating a fraudulent commodity pool scheme known as NCCN LLC (NCCN), the CFTC said.
The unregistered scheme gathered about $4 million and falsely claimed registration exemptions, the CFTC said.
Read the Nebraska complaint.