North Carolina Men Charged For $2.3 Million Forex Ponzi Scheme
The Commodity Futures Trading Commission ("CFTC") charged two North Carolina man with operating a foreign exchange Ponzi scheme that raised at least $2.3 million from investors. Ron Earl McCullough and David Christopher Mayhew, both of Raleigh, North Carolina, were charged with multiple violations of the Commodity Exchange Act. The CFTC is seeking injunctive relief, disgorgement of all ill-gotten gains, restitution, civil monetary penalties, and the appointment of a receiver if necessary.
According to the CFTC, McCullough and Mayhew began soliciting funds from investors to engage in purported foreign exchange trading. For example, this included promises to a North Carolina couple that if they were to invest $300,000, the men would return $300,000 within 30 days and pay a trading profit of at least $400,000 in 60 days. Promises were also made to other investors to return at least twice the amount of their investments. In total, the men raised or solicited more than $2 million from investors.
Unsurprisingly, the promises of exponential short-term returns by the men were not the results of savvy trading, but rather what the CFTC alleged was a Ponzi scheme that used incoming investor funds to pay fictitious returns to investors. According to the CFTC, the men suffered trading losses of hundreds of thousands of dollars. Additionally, over $800,000 was misappropriated by the two men for personal expenses that included travel expenses, online forex trading courses, and even liposuction for Mayhew.
The CFTC's complaint is below: