CFTC: Michigan Man Sucked Church Members Into Forex Ponzi Scheme; Jeffery L. Groendyke Sued For Fraud

A Michigan man has been sued for fraud and misappropriation in yet-another alleged Forex Ponzi scheme, the CFTC said.

Jeffery L. Groendyke of the Grand Rapids-area community of Middleville, Mich., gathered at least $953,305 since May 2010 and ripped off at least 54 customers through his at-home business known as JG Forex Fund (JGF), the CFTC said.

The scheme “primarily” was targeted at congregants of a Middleville church, the agency alleged.

As the scheme progressed, some customers ended up becoming recruiters lured by commissions, the CFTC said.

But Groendyke never was registered with the CFTC “in any capacity,” and he traded customers’ commodity-pool funds in his own personal accounts, the CFTC said.

One account in which Groendyke allegedly traded purportedly had a balance of more than $1 million on Dec. 31, but actually had a balance of $14, the CFTC alleged.

Another account that purportedly contained more than $458,000 had an actual balance of $49, the CFTC charged.

Investors were given bogus information on the account balances and Groendyke’s trading prowess, the CFTC said. Filings suggest the scheme began to unravel last fall, but Groendyke continued to solicit funds

Although Groendyke “solicited and accepted at least $953,305,” he used “no more than $366,950 of that amount to trade forex,” the CFTC said.

“Instead of using participants’ funds to trade forex, as Groendyke represented, he transferred $461,385 of their funds to his personal bank account, used at least $26,966.14 to pay purported forex trading profits to existing participants in the manner of a Ponzi scheme, and used $124,970 to trade commodity futures for his own account,” the CFTC said.

 

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13 Responses to “CFTC: Michigan Man Sucked Church Members Into Forex Ponzi Scheme; Jeffery L. Groendyke Sued For Fraud”

  1. All this information is fake and surely, all lies. It seems as if this trader had funds transfered over to someone who was licensed.

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  2. Steve: All this information is fake and surely, all lies. It seems as if this trader had funds transfered over to someone who was licensed.

    Surely that’s the whole point, Steve.

    There never was any licensing involved, it was ALL faked.

    The CFTC is alleging Groendyke transferred money into his own bank accounts and whatever forex trading he did was using his own private trading account, NOT a licensed broker.

    That’s how these things generally work.

    The fraudster tells his or her victims they’re doing one thing, but doing something else.

    IOW, it’s ALL smoke and mirrors.

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  3. have you ever met this man? I can assure you… He is NOT livin the life of a crook. Check your sources. I have a feeling this guy will come out on top and the CFTC will look like morons.

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  4. Steve: He is NOT livin the life of a crook.

    I would suggest that’s because he lost a great deal of the money in bad trades.

    According to the (upheld) CFTC complaint to the U.S. District Court for the Western District Michigan:

    “Groendyke allegedly misrepresented to customers that his forex trading earned monthly profits ranging from 6.37 percent to 42 percent. IN REALITY, GROENDYKE USED LESS THAN HALF OF THE FUNDS SOLICITED TO TRADE FOREX AND LOST MORE THAN 88 PERCENT OF THOSE FUNDS TRADING, according to the complaint. To conceal his fraud, Groendyke provided false account statements to customers, showing that, as of December 31, 2010, he had $1,548,679 under management when, in fact, his forex accounts combined held a balance of less than $100 as of December 31, 2010, according to the complaint”

    IOW, he couldn’t live the life of a crook, he blew most of the money on bad trades and gave back some of the rest as “purported profit”

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  5. You just took a quote from the complaint. No one even has proof of anything. I can’t wait to laugh at the CFTC.

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  6. I’ve heard his investors are even defending him.

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  7. Some one is speechless. Some one knows nothing about Jeff Groendyke. Maybe for once this is a man who WAS NOT lying or scheming. Maybe for once the damn CFTC is wrong about someone and is ruining there life and reputation. Do some homework bitch.

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  8. Steve: Do some homework bitch.

    Rereading “How To Win Friends and Influence People” are we ????

    Way to go convincing readers of the legitimacy of your claims.

    Should we believe the CFTC which presented sufficient evidence to convince a Federal court judge or an anonymous poster who offers no contradictory evidence other than “maybe” and “for once”

    You DO know what you just said, don’t you “Steve” ???

    You said “for once”

    Would that be as in, “there have been no other occasions I know of in which the courts have been proven wrong AFTER issuing a freeze order, except on TV crime shows where I gained all my legal experience” ??

    Exactly what is it you’re implying here, “Steve” ???

    That the CFTC faked the evidence it presented to the court ??

    The judge is/was corrupt ???

    The CFTC didn’t actually investigate and they DON’T have any evidence and the complaint was just a knee jerk response ???

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  9. You ask a lot of questions for a little round man. I’m just saying there needs to be a scheme in a ponzi scheme. He didn’t rip anyone off. If he did, why are none of the investors he supposedly ripped off suing?

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  10. Here’s another couple of questions for you “Steve”

    Where on earth did you hear that there needs to be a “scheme” involved in running a ponzi ???

    As a matter of fact, have you read the actual CFTC complaint, or are you basing your argument on Patricks’ article and/or the CFTC press release ???

    If you HAD read the CFTC complaint which was presented to the court, you’d notice that the agency carefully used the terms “in the manner of a ponzi scheme” and “Groendykes scheme”

    The CFTC complaint also specifies exact amounts when discussing the money involved.

    For example, it states quite clearly: “Instead of using participants funds to trade forex, as Groendyke represented, he transferred $461,385 to his personal bank account, $26,966.14 of their funds to pay purported forex profits to existing participants in the manner of a ponzi scheme”

    Pretty exact amounts there, “Steve”

    My questions would be, how on earth did the CFTC know both the exact amounts, down to the cents and the exact destination of said funds if it hadn’t been “inside” the operation and bank accounts ??

    Have you been “inside” either the accounts or operation, “Steve” ???

    Further, the actual court presented complaint mentions monthly account statements issued by Groendyke purportedly showing the current state of the investment “pools”
    The CFTC also shows the ACTUAL state of the bank accounts on the corresponding date/s.

    My question would be, then, are you suggesting the CFTC made up the amounts in the relevant accounts, on the relevant day/s and that the state of the bank accounts WAS as shown by Groendykes’ communication/s with his clients ???

    Maybe it’s just my reading skills being lacking, but it sure looks to me as if the CFTC has/had been investigating the operation for more than a just a couple of weeks, at some stage has/had complete access to both the bank accounts AND the inner workings of the scheme and the filing of the complaint is, in fact, the CONCLUSION of a much longer story than the one here on Patricks’ blog.

    Oh, and BTW, as far as your question regarding why none of the victims have thus far complained, several questions spring to mind.

    1) Are you suggesting the CFTC should only act AFTER it receives a complaint ???
    2) How do you know the CFTC DIDN’T receive complaints ??
    3) Do you personally know everyone involved.
    4) Do you think the CFTC should be forced to name the complainants ??
    5) Do you think the CFTC just arbitrarily plucked Groendykes’ name out of the phone book and decided to investigate ??
    6) Do you think the CFTC investigators and/or the federal courts just have too much time on their hands and are merely filling in until a REAL case comes along ?

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  11. Grand Rapids Press:

    Middleville reverend once trapped in $10 million Ponzi scheme defends parishioner accused of fraud

    http://www.mlive.com/news/grand-rapids/index.ssf/2011/05/middleville_reverend_once_trap.html

    Steve: the damn CFTC

    Steve: Do some homework bitch.

    Steve: You ask a lot of questions for a little round man.

    Steve: I can’t wait to laugh at the CFTC.

    Steve,

    If your aim is to offer Groendyke support, how are any of these remarks helpful?

    If you take some time to read this Blog, you’ll find many examples of folks who’ve sought to “defend” an opportunity by resorting to ad hominem attacks or deflections. Some of the “defenses” have been downright bizarre.

    EXAMPLE: Some of the AdSurfDaily folks said the work of the U.S. Secret Service and federal prosecutors was the work of “Satan” and “Nazis.” Some of them circulated a “prayer” that called for God to strike the prosecutors/investigators dead. Others made a federal judge the subject of a “prayer” chain and later described her as “brain dead” if she ruled against ASD.

    EXAMPLE: In the “3 Hebrew Boys” case, about 100 supporters of the scheme amassed in Columbia, S.C., to protest against the government’s actions. The defendants ultimately accused the U.S. Attorney of “treason.” One of the defendants declared himself a “sovereign” being:

    http://patrickpretty.com/2009/11/24/special-report-convicted-3-hebrew-boys-ponzi-figure-declares-he-is-sovereign-joseph-brunson-says-prosecutors-have-no-authority-over-him/

    Perhaps you might gain additional insight about odd “defenses” from this story:

    http://patrickpretty.com/2011/04/01/special-report-investor-in-alleged-florida-forex-caper-arrested-for-bankruptcy-fraud-botfly-llc-ponzi-case-reminiscent-of-asd-case-female-investigator-called-vile-names-accused-schemer-david-lewal/

    Finally, it is hardly unusual for church members to get sucked into Forex fraud schemes and other forms of investment fraud:

    http://patrickpretty.com/2011/01/30/update-south-carolina-pastor-sued-by-cftc-in-forex-ponzi-scheme-case-now-facing-criminal-charges-of-bank-fraud/

    http://patrickpretty.com/2010/12/07/bulletin-former-pastor-sentenced-to-54-years-in-indiana-ponzi-and-affinity-fraud-scheme-investors-believed-they-were-funding-church-building-projects/

    http://patrickpretty.com/2010/08/19/bulletin-church-pastor-was-running-forex-ponzi-scheme-cftc-says-agency-gets-emergency-asset-freeze-against-jeremiah-c-yancy/

    http://patrickpretty.com/2009/10/17/news-and-notes-arrests-made-in-ponzi-and-affinity-fraud-scheme-that-targeted-21-michigan-churches-pennsylvania-man-accused-of-targeting-credit-unions-in-ponzi-scheme/

    It is absolutely true that Groendyke is entitled to his day in court. Even so, the “defenses” you’ve advanced in this thread hardly help to make him a sympathetic figure.

    And the story in today’s Grand Rapids Press only leads to more questions.

    I’m wondering, Steve: Do you think the members of the First Baptist Church of Middleville should do what you’re doing — namely, casting the CFTC as a collection of incompetents who should be laughed at and referring to a researcher as a “bitch” who doesn’t do his homework?

    It has been my experience after writing about hundreds of fraud cases that the supporters often have an incomprehensible, incongruous PR strategy.

    Patrick

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  12. Patrick,

    your reply brings to mind the 2003 prosecution of Blake Prater/Wellspring Capital http://www.sec.gov/divisions/enforce/claims/wellspring.htm

    Four years after the civil action and even AFTER Prater pleaded guilty to criminal charges and had begun his sentence, there are STILL victims in total denial who STILL maintain their losses were caused by the prosecutors.

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