A Jamaican banker who admitted to orchestrating a Ponzi scheme that defrauded victims out of more than $200 million is set to be sentenced today in an Orlando, Florida courtroom. David A. Smith, 41, faces sentencing on four counts of wire fraud, a count of conspiracy to commit money laundering, and 18 counts of money laundering, to which he pled guilty in March. While each count carries a maximum sentence of twenty years, the sentencing judge will ultimately decide the sentence and whether the terms will run concurrently or consecutively. Smith was previously sentenced by a Turks and Caicos court to six years in prison on fraud and conspiracy charges relating to the scheme.
According to his plea agreement, Smith formed Overseas Locket International Corporation ("OLINT") in February 2005 in Panama, with a principal place of business in Kingston, Jamaica. Various derivations of the company were later registered in the Turks and Caicos and Jamaica, along with "i-Trade" that was registered in Lake Mary, Florida. OLINT was advertised as an investment club that traded foreign currencies. Investors were promised the prospect of high monthly returns, with only 20% of their prospective investment at risk. Fictitious account statements were distributed to clients, often showing monthly returns ranging from 5% to 10%. Additionally, Smith told to investors that he had never suffered a monthly trading loss. In total, over $220 million was collected from 6,000 investors located in Jamaica, Florida, and the Turks and Caicos. Yet, only a small portion of investor funds were used to trade foreign currencies. The majority of funds were instead used to pay redemption requests and monthly interest payments to existing investors, as well as fund a lavish lifestyle.
Prosecutors have asked for a lengthy sentence based on the seriousness of Smith's crimes. In addition to his prison sentence, Smith will also likely be ordered to pay restitution to defrauded investors.
A copy of the plea agreement is here.