Thu, 24/09/2009 - 11:44
The US Commodity Futures Trading Commission has obtained a preliminary injunction against defendants Beau Diamond and his company, Diamond Ventures, both of Sarasota, Florida.
The order, entered on 22 September 2009, by US District Court Judge Elizabeth A. Kovachevich in Tampa, continues the court’s 3 September asset freeze against Diamond and DV and prohibits them from further violating the Commodity Exchange Act, as charged.
The court found the preliminary injunction necessary to protect the public from further loss and damage and to enable the CFTC to fulfill its statutory duties.
The court’s order stems from a CFTC complaint filed on 3 September 2009, charging Diamond and DV with misappropriation and fraud in operating a foreign currency Ponzi scheme. The defendants allegedly solicited approximately USD37m from at least 200 investors.
The CFTC alleges that, from at least 18 June 2008 to the present, the defendants misappropriated at least USD850,000 of customer funds and used the money for gambling and luxury purchases, including jewelry, air fares and hotel accommodations.
According to the CFTC complaint, the defendants falsely guaranteed the return of investors’ principal and monthly returns ranging from 2.75 per cent to five per cent, purportedly paid from the defendants’ successful forex trading. In reality, the defendants lost USD13.3m trading forex. To conceal and perpetuate their alleged fraud, the defendants provided customers with false account statements misrepresenting that their accounts were increasing as promised, although the accounts were actually incurring substantial losses.
On 2 September 2009, Diamond was arrested in Florida by Federal authorities in connection with a related criminal complaint. On 10 September, a Federal magistrate judge issued an order denying Diamond’s request for bond and ordered him detained.
In the continuing litigation, the CFTC is seeking permanent injunctive relief, return of funds to defrauded investors, repayment of ill-gotten gains, civil penalties and other equitable relief.
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