The US Commodity Futures Trading Commission (CFTC) has obtained more than USD4 million in restitution and civil monetary penalties in a federal judgment order against defendants Beau Diamond and his company, Diamond Ventures LLC (DVL), both of Sarasota, Florida.
US District Court Judge Elizabeth A Kovachevich entered the order requiring the defendants to pay USD1,071,035 in restitution to defrauded investors and a civil penalty of USD3,213,105 for operating a foreign currency (forex) scam from April 2006 to September 2009.
The order stems from a CFTC complaint filed on September 3, 2009, charging the defendants with misappropriation and fraud in operating a USD37 million forex Ponzi scheme that defrauded at least 200 customers.
The complaint charged the defendants with falsely guaranteeing investors the return of their principal plus monthly returns ranging from 2.75 per cent to 5 per cent, purportedly paid from defendants’ successful forex trading. In reality, the defendants lost USD13.3 million trading investors’ funds, according to the CFTC.
To conceal and perpetuate their fraud, the defendants allegedly provided investors with false account statements showing that their accounts were increasing as promised although the accounts actually were losing money. The CFTC also alleged that the defendants misappropriated at least USD850,000 of customer funds and used the money for luxury purchases and gambling.
On December 22, 2010, Diamond was sentenced in a criminal proceeding to 186 months (more than 15 years) imprisonment and 36 months of supervised release. Diamond was ordered to pay more than USD23 million in restitution to defrauded investors in the federal criminal prosecution based on substantially the same facts as alleged in the CFTC’s civil enforcement action. A jury found Diamond guilty on all 18 charges of the federal indictment on July 12, 2010, after an eight-day trial.
