Search
Most Recent
AdSurfDaily Agape agent American Integrity Aronson asset sales Attorney av bar reg baker bank bank of america Bankruptcy baumann bermudez black diamond blackwell bridge loan bull cattle CD celebrity cftc charity china China Voice church cityfund claims claims process clawback commission commodities commodity pool computer program congress Crown Forex currency death sentence denver diamond bar disgorgement Distribution Dodd-Frank donnan Dreier dunhill e-bullion elderly E-M Management SEC england Fairfield family FBI FDIC Fees female ponzi scheme financial advisor fine FINRA football forex fraud fufta fugitive Full Tilt gift card guilty plea GunnAllen hawaii Heckscher HSBC india invers forex janvey John Morgan JP Morgan kansas ken bell kenzie las vegas lawsuit lawyer libya Lifland machado Madoff Marian Morgan metro dream homes mets milberg millers a game Morgan European Holdings mortgage multiple schemes NCAA Net Winner new jersey notes objection Oxford Patrick Kiley paul burks PermaPave Pettengill Petters Picard poker Ponzi ponzi scheme ponzi scheme database ponzi scheme list Prime Rate profitable sunrise prosun pta puerto rico Rakoff real estate receiver receivership regulation relief defendants religion remission repeat offender restitution Rothstein RRA sec sentencing simmons sipa sipc snelling standing stanford stettin subpoena td bank treasury bonds treasury strip Tremont Trevor Cook UBS UFTA uga utah venture advisors Wachovia wilpon wire fraud woman zeek zeek rewards zeekler zeekrewards
Social
Recent SEC Releases
« Valentine's Day Surprise for Madoff Victims as Trustee Seeks To Make Third Interim Distribution | Main | Zeek Judge Denies Request For Appointment of Examiner, Has 'Utmost Confidence in Receiver's Efforts' »
Monday
Feb112013

CPA Convicted for Role in $40 Million Ponzi Scheme

A federal jury took 45 minutes to convict an Ohio man of multiple criminal charges relating to his involvement with the 'Black Diamond' Ponzi scheme that ranks as one of the worst financial frauds in North Carolina history.  Jonathan D. Davey, 48, was convicted of one count each of securities fraud conspiracy, wire fraud conspiracy, money laundering conspiracy, and tax evasion.  He could face up to fifty years in prison at sentencing if given the maximum for each charge.

According to the criminal charging document, Davey served as administrator for several of the hedge funds involved in the Black Diamond Ponzi scheme.  The scheme, masterminded by Keith Simmons, was presented to potential investors as a lucrative forex trading operation that promised risk-free annual returns exceeding 20%.  Simmons appealed to investors' faith, quoting Bible verses and stressing his devout Christianity to portray himself as trustworthy.  Over 200 investors bought Simmons' act, investing over $35 million in Black Diamond.  Many became convinced after they were provided with regular account statements purportedly showing consistent account growth.  

Over $10 million of these funds were raised by Davey through his own hedge fund, "Divine Circulation Services'.  Davey told investors that he was operating a legitimate hedge fund, and that he had conducted due diligence on Black Diamond.  However, neither was true.  Additionally, when the Black Diamond scheme began to collapse, Davey orchestrated a separate Ponzi scheme in which he raised over $5 million to use to pay fictitious 'returns' to old investors.  While investors were told that Davey managed a total of over $120 million, in reality the amount on hand was less than $1 million.  

In addition to making Ponzi-style payments to investors of nearly $20 million that purportedly represented investing returns, Simmons, Davey, and others diverted investor funds for a variety of unauthorized personal expenses.  In one example, Davey used an offshore shell company in Belize to fund the construction of an Ohio mansion.  Additionally, Simmons was said to have paid women for sex and furnished "lavish love condominiums" with investor funds.  Simmons was recently sentenced to a fifty-year term.  

Davey remains free on bond pending his sentencing, which has not yet been scheduled.  

PrintView Printer Friendly Version

EmailEmail Article to Friend

References (3)

References allow you to track sources for this article, as well as articles that were written in response to this article.
  • Response
    CPA Convicted for Role in $40 Million Ponzi Scheme - Ponzitracker - Ponzitracker
  • Response
    CPA Convicted for Role in $40 Million Ponzi Scheme - Ponzitracker - Ponzitracker
  • Response
    Response: Premium Account
    CPA Convicted for Role in $40 Million Ponzi Scheme - Ponzitracker - Ponzitracker

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>