A Florida man is facing criminal charges for orchestrating a Ponzi scheme that defrauded investors out of over $1 million by utilizing a trading strategy based on lunar cycles and the gravitational pull of the moon. Gurudeo "Buddy" Persaud, 47, was charged with one count of mail fraud and four counts of wire fraud in connection with the scheme. Each charge carries a maximum prison term of twenty years as well as criminal monetary penalties. The charges are the latest in Persaud's legal troubles, who was the target of a civil enforcement action brought by the Securities and Exchange Commission in mid-2012.
According to the indictment unsealed this past Tuesday, Persaud told potential investors that he was a certified financial planner with extensive experience in the financial services industry. According to Persaud's Broker Check Report provided by the Financial Industry Regulatory Authority, Persaud was employed at Money Concepts Capital Corp. which is based in Palm Beach Gardens, Florida. Persaud touted his company, White Elephant Trading Company LLC ("White Elephant"), to investors as a safe investment option that guaranteed annual returns ranging from 6% to 18% through investments in the futures markets and other markets. Investors were also provided with a personal guarantee from Persaud that their investment would be secure. Based on these representations, Persaud was able to raise over $1 million from 14 investors.
However, many of the statements made by Persaud to investors were false or misleading, including the failure to disclose that Persaud's trading strategy was based on lunar cycles and the gravitational pull of the moon. Had they been informed, investors might have rightly questioned such a philosophy; Persaud suffered net trading losses in his first month of trading and would ultimately lose over $400,000. Additionally, Persaud misappropriated over $400,000 in investor funds for a variety of unauthorized purposes that included sustaining he and his family members' lavish lifestyles.
A copy of the indictment is here.
A copy of the SEC Complaint is here.