US authorities accused the operator of a defunct forex firm of running a “Ponzi scheme-like” scheme that swindled more than $1.1 million from investors by using fake trading documents.
According to the court papers, Thomas Lanzana and his company, Blackbox Pulse (Unique Forex) fraudulently solicited the money from 45 investors to participate in his forex trading pools and other investments. The South Carolina resident was indicted today on two counts of wire fraud and one count of commodities fraud.
If convicted with wire fraud, Lanzana could face up to 30 years in prison and a fine of $1 million, while the second carries a maximum ten years in prison and a similar fiscal penalty.
The order is the continuation of the initial anti-fraud enforcement action filed by the US Commodity Futures Trading Commission (CFTC) against Lanzana in 2017.
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Funds went to golf expenses, among others
To create the illusion of stability, the defendants distributed false account statements to pool participants, telling them that Lanzana was a successful forex trader. All the while, Lanzana concealed large trading losses from investors and published false statements showing balances of $800,000 for a forex trading account that did not exist.
Created in February 2013 and dissolved in February 2017, the investment pools didn’t generate any income while Lanzana misappropriated $350,000. Additionally, in order to shore up the fraud, he used a Ponzi scheme style in which he issued payments to investors that he claimed represented profits but were, in fact, other investors’ funds.
According to the complaint, Lanzana also spent a portion of forex pool’s assets to pay for his personal expenses, including purchases on Amazon.com, payments to a luxury car dealer and a jewelry retailer, and golf expenses, among others.
Immediately after the complaint was filed by the CFTC in 2017, a New Jersey court issued an emergency order freezing preserving assets under the defendants’ control and prohibiting them from “destruction or concealment of their books and records.”