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Foreign Currency Ponzi Scheme in North Carolina

North Carolina Man to Spend 50 Years in Prison for $40M Foreign Currency Ponzi Scheme

The Ponzi scheme “mastermind” behind a particularly nefarious $40 million, foreign currency investment fraud scheme has been sentenced to 50 years in prison and ordered to pay $35,331,632 in restitution, according to the U.S. Attorney’s Office.

Keith Franklin Simmons, of West Jefferson, North Carolina, was charged with one count of securities fraud, one count of wire fraud, and two counts of money laundering in Aug. 2010. He received his sentence in federal court on May 23.

“What makes this case particularly troubling is that from the beginning, this defendant had no intention of investing a single dime of the victims’ money,” said U.S. Attorney Tompkins in a May 23 press release. “Simmons made slick presentations to his victims about lucrative investment returns that were filled with lies and deceit. … The impact of Simmons’ fraud has been devastating to his victims, who trusted him with their hard-earned money.”

In an effort to prevent similar schemes, Tompkins added a warning: “I want to caution potential investors before they turn over their life’s investments to pay close attention to sales pitches that promise large returns on investments. If it sounds too good to be true, it probably is.”

According to court documents, Simmons began soliciting investments in Black Diamond – an opportunity he said was generating profits of more than 48 percent per year – as early as April 2007. The 400 investors lured into the scheme were told their funds would be used for trading in the foreign currency market.

The investment scheme lasted for over two years, but none of the investors’ funds were ever invested in any foreign currency market. Instead, Simmons used the money to pay for his lavish lifestyle.

When handing down the sentence, U.S. District Judge Robert J. Conrad, Jr. said: “The court could not help being struck by the devastation suffered by the victims in this case … A 50-year sentence is an enormous sentence, but there seems to be no other sentence … that would accomplish justice in this case.”

For additional information, click here to read the full U.S. Attorney’s Office press release.

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

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