The Commodity Futures Trading Commission ("CFTC") has filed an emergency enforcement action charging a South Carolina couple with operating a foreign exchange Ponzi scheme that raised over $3 million from victims. Robert and Amy Leben (the "Lebens"), of Columbia, South Carolina, were charged with multiple violations of the Commodity Exchange Act in a sealed complaint that was filed last week. The complaint, which was unsealed today, seeks permanent injunctive relief, disgorgement of ill-gotten gains, civil monetary penalties, and other relief.
According to the CFTC, the Lebens owned and operated Structured Financial Group, LLC ("SFG") since its formation in 2006. SFG was marketed as a commodity pool to investors, who were told that SFG invested in "treasury strips" and futures markets. At least one investor was told that Robert Leben had previously been a successful bond trader. In exchange for their investment, SFG promised investors quarterly payouts of 3.5%, which equated to an annual return of 14%. Upon deciding to invest in SFG, investors were directed to wire their investment to an unidentified attorney serving as SFG's agent in Baltimore, Maryland. In total, at least $3.2 million was raised from at least a dozen investors.
However, rather than carrying out the investment program represented to investors, the Lebens instead held less than $500,000 in "treasury strips." Additionally, while the Lebens did engage in forex trading using investor funds, the accounts experienced net losses in four of the six relevant years. The remainder of funds were deposited in a money market account held by SFG. According to the CFTC, Amy Leben then arranged for an undocumented $5 million line of credit from the money market account - which allegedly remains unpaid. The Lebens are also accused of using debit cards to spend nearly $1 million of investor funds on a variety of unauthorized expenses, including a $500,000 house, a $150,000 swimming pool, and more than $200,000 in cash gifts to their children.
A copy of the complaint is below: