Another week another Ponzi scam: CFTC Charges Charlotte, North Carolina Couple Sidney and Charlotte Hanson and their Companies with Operating a $22.5 Million Foreign Currency Ponzi Scheme

Looks like we can't have one quiet week without Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term Ponzi scams uncovered. We had plenty of these in the US, some in Australia and even in Vietnam.

Now the regulation watchdog has uncovered another one: Investors’ money allegedly used to purchase an 88-acre farm, private plane rentals, and luxury vacations; court freezes assets

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced today that it charged Sidney S. Hanson, Charlotte M. Hanson and their companies Queen Shoals, LLC; Queen Shoals II, LLC; and Select Fund, LLC (collectively, the defendants), all of Charlotte, North Carolina, with operating a Ponzi scheme involving more than $22 million in connection with off-exchange foreign currency futures (forex) trading.

According to the CFTC’s complaint, the defendants, from at least June 18, 2008 to the present, fraudulently solicited at least $22.5 million from individuals and entities to trade forex, among other things, on their behalf. The defendants allegedly operated a Ponzi scheme and misappropriated millions of dollars.

In both their personal and website solicitations, the defendants falsely claimed success in trading forex, guaranteed customers profits through the use of silver and gold bullion-backed “non-depletion accounts,” and represented that there would be no risk to customers’ principal investment, the complaint alleges. The defendants allegedly falsely represented that a non-depletion account guarantees that the customer will receive the return of invested principal and the promised “interest.”

The complaint also alleges that the defendants lured prospective customers with promises of returns of 8 percent to 24 percent through customers investing via promissory notes for terms of one to five years; customers who committed to the longest monthly terms were promised the greatest “profits.” The defendants claimed to pool customers’ funds and use the profits purportedly generated by trading forex, along with gold and silver bullion, to guarantee Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term to customers at the end of the five-year promissory note period.

In reality, the complaint alleges, the defendants deposited little or no customer funds into forex trading accounts. Rather, the defendants misappropriated customer funds to finance the Hansons’ personal expenses, including the purchase of an 88-acre farm, private plane rentals and luxury vacations. Defendants also allegedly used customer funds for purported profit payments or the return of principal to existing customers, similar to a Ponzi scheme.

All this should have raised a major red flag for the potential victims and I’d like to remind here, again, what should serve as an alert when thinking of making an investment in a high-return investment scheme. When some or all of these conditions apply to your potential money manager – it’s time to take a step back and reconsider all the details.

• Starting through an affinity group and spreading the word from there.
• Promising high monthly dividends on a venture that is inherently risky.
• Having an agreement signed by investors not to divulge their deal.
• Lacking filings to the Internal Revenue Service.
• Charging hefty referral fees early on and late bonuses to encourage fresh inflows.
• Having a “reload” or recovery phase.