FLORIDA — AGAIN: CFTC Charges Sunshine State Couple Amid Spectacular Allegations They Posed As Forex Experts, Targeted Seniors And Handed Off More Than $22 Million To Man Who Was Trying To Cover Up Previous Ponzi Scheme

Gary and Brenda Martin of St. Augustine, Fla., posed as Forex dealers and experts, operated a website advertising their purported expertise, bragged about the talents of their unqualified sales “consultants” — and collected more than $22 million in an incredibly elaborate fraud scheme, the CFTC has charged.

Neither of the Martins was registered with the CFTC. In fact, the agency said, they had “no expertise or experience in trading forex or any other commodity” and had “no trading accounts.”

“[N]o forex trading occurred and no profits were ever realized,” the CFTC said.

Unbeknown to customers, what the Martins did, according to the CFTC’s disturbing allegations, was funnel money from their customers to Sidney S. Hanson.

Hanson, in turn, paid the Martins “referral fees” of up to 5 percent, based on the sums the Martins’ customers provided the couple. In this way, the Martins racked up $1.44 million in undisclosed commissions paid by Hanson, while the Martins’ customers believed they were doing business with the couple.

And just who is Sidney S. Hanson?

Why, Sidney S. Hanson is none other than the Sidney S. Hanson charged criminally in North Carolina by the Feds two years ago in a money-laundering, wire-fraud and securities-fraud case that alleged he was operating schemes dating back at least to 2000.

And Sidney S. Hanson is the same Sidney S. Hanson charged in this companion action by the SEC in 2009. Also charged in the SEC case was Charlotte Hanson, Sidney Hanson’s wife. The CFTC also charged the Hansons in 2009.

The first scheme was a loan scheme known as Apollo Trust, which promised “extraordinary rates of return,” according to federal prosecutors.

Apollo, the CFTC said, was a Ponzi scheme — and a new scheme known collectively as the Queen Shoals Group emerged to cover the Apollo fraud.

Along the way, customers’ money was used to finance “luxury resort vacations, private plane rentals, daily living expenses, and the purchase of an 88 acre farm,” the CFTC said in 2009.

Sidney Hanson is scheduled to be sentenced on the criminal charges March 31.

The Martins operated a Queen Shoals website and a Florida company known as Queen Shoals Consultants LLC, the CFTC said.

They “simply” turned over huge sums to Hanson to plumb a commission, the CFTC charged.

When Gary Martin was asked what Hanson did with the money, he replied, “I don’t know,” the CFTC charged.

And this occurred after the Martins assured their customers that they were Forex experts with “vast experience.”

Retirees and persons nearing retirement were lured into the scheme with the promise of high profits, the CFTC charged.

“The Martins allegedly targeted customers at or near retirement who held individual retirement accounts (IRAs), luring them with promises of guaranteed annual returns of between eight to 24 percent generated by trading forex and other instruments,” the CFTC charged.  “The Martins also guaranteed an’ additional 1%’ to customers who held IRAs and agreed to rollover their IRAs into the defendants’ scheme.”

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One Response to “FLORIDA — AGAIN: CFTC Charges Sunshine State Couple Amid Spectacular Allegations They Posed As Forex Experts, Targeted Seniors And Handed Off More Than $22 Million To Man Who Was Trying To Cover Up Previous Ponzi Scheme”

  1. It appears young Sidney won’t be going anywhere in a hurry:

    “Hanson Pled Guilty in Criminal Matter and Is in Federal Custody

    Hanson pled guilty to securities fraud and mail fraud in the criminal matter United States v. Sidney Stanton Hanson, Case No. 09-CR-09CR139-RJC (U.S. District Court of the Western District of North Carolina) for acts arising out of his operation of the Queen Shoals Group, among other entities. Hanson is currently in federal custody awaiting sentencing, scheduled for March 31, 2011.

    In addition to the criminal case above, Hanson is a defendant in CFTC v. Queen Shoals, LLC, Case No. 09-CV-335 RJC, filed in the U.S. District Court of the Western District of North Carolina. The CFTC charged Hanson and other defendants, all of Charlotte, N.C., with operating a Ponzi scheme involving more than $22 million in connection with off-exchange forex futures trading (as to the CFTC action, which is still in litigation, see CFTC Press Release 5689-09, August 7, 2009)”