The American Commodity Futures Trading Commission (CFTC) has announced that a U.S. District Court ruled against Keith Simmons and his company Black Diamond Capital Solutions, and against Deanna Salazar and her companies, Life Plus Group, LLC and Black Diamond Holdings, LLC, over a forex scam. The court imposed a total of $76 million in penalties on the couple as well as permanent trading and financial registration bans.
The case was initiated by a CFTC complaint from 2011, charging Simmons, Salazar, and their companies with fraudulent solicitation and misappropriation of customer funds in connection with a Ponzi-style scheme involving forex trading.
Simmons was sentenced to 40 years and ordered to pay $35 million
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The court found that from at least April 2007 through at least 2009, Simmons and Salazar, accepted at least $35 million from at least 240 individuals to engage in forex trading through a trading platform known as Black Diamond. In fact, according to the court, no forex trading was ever conducted through Black Diamond, and the platform never existed.
In reality, the fraudsters just used millions of dollars of new client funds to pay out “profits” to existing clients, as is typical of a Ponzi scheme. They also used client funds for personal and unrelated business expenses, according to the court. To conceal their fraud, Simmons, with the assistance of Salazar, issued false customer account statements reflecting the promised returns or more based on Black Diamond’s supposedly “successful” forex trading.
In a related criminal case, Simmons was convicted on December 16, 2010, on charges of securities fraud, wire fraud, and money laundering. Simmons was sentenced to 40 years’ incarceration and ordered to pay criminal restitution of $35 million. On December 7, 2010, Salazar pleaded guilty to charges of investment fraud conspiracy and tax evasion. Salazar was sentenced to 4.5 years’ incarceration and ordered to pay $5 million in criminal restitution. Both Simmons and Salazar are still serving their sentences.
Also charged in the original CFTC complaint are Bryan Coats of Clayton, North Carolina and his company, Genesis Wealth Management, LLC, and Jonathan Davey of Newark, Ohio and his companies, Divine Circulation Services, LLC, Divine Stewardship, LLC, Safe Harbor Ventures, Inc., Safe Harbor Wealth Investments, Inc., and Safe Harbor Wealth, Inc. The CFTC’s litigation against these Defendants is ongoing.