US regulator CFTC has filed a complaint against FX ponzi scheme set up by Brad Lee Demuzio who ran Demuzio Capital. It is believed the scheme solicited around $1.8 million.
Demuzio, an unregulated money manager, would solicit clients to invest with him in the high risk Forex market. However Demuzio was misusing the client money and spending funds on his lavish life style.
The UK’s FSA arrested a 23-year-old who was caught out after ‘over’ spending his fraudulent money.
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Demuzio Capital has taken around $1.8 million of client money and generated a healthy $900,000 loss. The defendant was mis-informing clients over a three year period that their funds were actually safe and making money. Demuzio sent his clients monthly statements with false information showing the accounts in profit.
Demuzio never stopped his misuse here, when clients were demanding funds he sent another false document claiming to be from the CFTC saying that Demuzio Capital is currently under investigation and the funds are frozen by authorities.
Demuzio has admitted his crime and awaits sentencing.