Thomas Lanzana, a former resident of New Jersey, was arrested in Park City, Kansas, US Attorney Craig Carpenito announced on Wednesday. His arrest was the result of charges that he defrauded a minimum of 20 people in a $900,000 foreign currency Ponzi scheme.
The 51-year-old who now resides in South Carolina was charged with one count each of wire fraud and commodities fraud. According to the statement released by the US Department of Justice (DOJ), Lanzana claimed that the investments were highly successful financial instruments.
The criminal complaint alleges that from as early as 2013, Lanzana made around $900,000 from soliciting funds from at least 20 clients. He did this by encouraging them to invest in algorithm-based trading pools in forex derivatives and other financial instruments.
He allegedly claimed that he was an experienced and successful forex trader, which the criminal complaint states is false. Furthermore, to keep the trust of his customers, he sent them false account statements, sent false tax documents and also posted fake monthly account statements to his company’s website.
Why Ethereum Needs Layer 2 Solutions More Than EverGo to article >>
According to the complaint, through these actions, he misappropriated approximately $350,000 in customer funds, with some going towards repaying earlier investors, as is the characteristic of a Ponzi scheme.
He also allegedly used some of the money for his own uses. The complaint states that this includes purchases on Amazon, golf expenses, and payments to a jewelry retailer and a luxury car dealer.
Innocent Until Proven Guilty
The maximum potential penalty for Lanzana’s accused wrongdoing is 20 years in prison and a fine of $250,000, or twice the gross gain or loss caused by the Ponzi scheme, for the count of mail fraud. For the count of commodities fraud, this carries a maximum penalty of 10 years imprisonment and a $1 million fine, or twice the gross gain or loss.
The DOJ reminds that these charges are only accusations and Lanzana is presumed innocent until proven guilty.