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 telexfree treasury bonds treasury strip Tremont Trevor Cook UBS UFTA uga utah venture advisors Wachovia wilpon wire fraud woman zeek zeek rewards zeekler zeekrewards
Recent SEC Releases

Entries in td bank (1)


North Carolina Man Sentenced to Fifty Years in Prison for $40 Million Ponzi Scheme

A federal judge sentenced a North Carolina man to fifty years in prison for what prosecutors called "the worst financial crime in this district in memory."  Keith Simmons, 47, received the sentence after being convicted of one count of securities fraud, one count of wire fraud and two counts of money laundering in December 2010.  In delivering the sentence, which was the term sought by prosecutors, United States District Court Judge Robert Conrad labeled the case the most damaging financial crime he had presided over.  

Simmons was the mastermind of a foreign currency ("forex") trading operation known as Black Diamond.  Through a network of co-conspirators and feeder funds, Simmons solicited investors beginning in 2007 for the purported purpose of engaging in forex trading through a Black Diamond trading platform that had been highly successful.  Potential investors were told that average returns exceeded four percent per month, and that their investment was safe as no more than 20% of invested funds would be at risk at any time.  Additionally, Simmons is said to have quoted Bible verses and stressed his devout Christianity to induce people into investing with Black Diamond.  In total, approximately 240 investors contributed at least $35 million to the scheme.  These investors received monthly account statements that made it appear as if investors' accounts were enjoying steady growth.

However, rather than conducting any forex trading, Simmons and several co-conspirators misappropriated millions of dollars for personal and business expenses.  This included funding a lavish lifestyle of money, sex, and wealth for Simmons, who prosecutors alleged paid women for sex and furnished "lavish love condominiums" with investor funds.  Additionally, approximately $18 million was returned to investors in the form of fictitious monthly returns.  

After monthly interest payments ceased in March 2009, Simmons was arrested by the FBI in December 2009. Several of Simmons' co-conspirators have also been arrested or pled guilty.  One of his co-conspirators, Brian Coats, pled guilty in October 2011 to one count of conspiracy to commit fraud and one count of money laundering conspiracy.  Coats is awaiting sentencing and faces up to fifteen years in federal prison.  Additionally, Deanna R. Salazar, 53, was also sentenced on Wednesday, receiving a fifty-four month sentence from Judge Conrad and ordered to pay $5,112,687 in restitution.  She pled guilty in December 2010 to conspiracy to commit securities, commodities and wire fraud and tax fraud.   

The case was also significant in that the bank used by Simmons to perpetuate the scheme, CommunityONE Bank, N.A., was criminally charged over its lack of an effective anti-money laundering program.  The bank entered into a deferred prosecution agreement ("DPA") with the government, under which the bank, after paying $400,000 in restitution to the victims of Simmons' scheme, will be able to have the criminal charges dismissed after two years.  According to U.S. Attorney Anne Tompkins,

This bank’s failure to detect and report a ponzi scheme cost it 16 percent of its value.  Other financial institutions should heed this warning:  the Bank Secrecy Act applies to more than just drug and terrorist financing.”

CommunityONE Bank is not the only bank to suffer financially after failing to detect a Ponzi scheme.  In January 2012, a federal jury awarded $67 million to victims of Scott Rothstein's $1.4 billion Ponzi scheme, finding that the bank ignored clear signs of Rothstein's scheme and facilitated its existence.  Rothstein was also sentenced to fifty years in prison for masterminding his scheme.  

The government's sentencing memorandum is here.