A Florida federal judge handed down a thirty year prison sentence to the mastermind of an international Ponzi scheme that took in over $200 million dollars from investors. David Smith, 42, had previously pled guilty to a twenty-three count indictment accusing him of money laundering and wire fraud. Prosecutors had asked for a minimum sentence of thirty years, which will be served concurrently with an earlier six-year sentence handed down by the Turks and Caicos. United States District Judge Mary Scriven also ordered Smith to pay $55 million in restitution to defrauded investors, although it remains unclear as to whether Smith has any remaining assets that can be used to satisfy the order.
As covered by Ponzitracker, Smith operated Overseas Locket International Corporation ("OLINT"), which had a presence in the United States and several other countries including Panama and Jamaica. OLINT promised investors high monthly returns through the purported use of a foreign currency trading strategy. Investors were told that only a small percentage of their principal was at risk, and were assured of the safety of their investment through the use of fictitious monthly account statements and Smith's assertion that OLINT had never suffered a monthly trading loss. Authorities estimated that over $200 million was collected from approximately 6,000 investors both in the United States and overseas.
Smith will be transported to the Turks and Caicos to serve out his six-year sentence, after which he will return to the United States to serve the remaining twenty-four years of this conviction. There is no parole in the federal prison system.