Illinois Forex Ponzi Schemers Get Combined Prison Sentences Of Nearly 30 Years; Feds Identify More Than 1,000 Victims Of $17 Million Swindle In Which $1 Million Went To ‘Strip Club And Restaurants’

Charles G. Martin has been sentenced to 17 years in federal prison — and fellow Forex Ponzi schemer John E. Walsh has been sentenced to more than 12 years — in a case in which investors’ money went to pay for strippers, fine meals, fine hotels, a piano, high-end electronics, artwork, jewelry, flashy cars and private jets, prosecutors said.

Martin, 46, formerly resided in Glencoe, Ill., and Malibu, Calif. Walsh, 63, lived in Lake Forest, Ill.

More than 1,000 investors “worldwide” got sucked into the scheme, which gathered more than $17 million. The fraud gained a head of steam even though Martin previously had been in trouble with the National Futures Association and had been barred from being a principal in a commodities firm, prosecutors said.

Martin and Walsh were principals of an entity known as One World Capital Group LLC.

“One World’s trading platform operated as a front to placate customers whose margin funds were being systematically misappropriated by them,” the office of U.S. Attorney Patrick J. Fitzgerald of the Northern District of Illinois said.

After investigators peeled back layers of the One World onion, they found that tax evasion had occurred, in addition to wire fraud and securities fraud, prosecutors said.

U.S. District Judge Virginia Kendall ordered restitution of more than $16.9 million.

Customers who provided money did not realize they were getting scammed out of the gate, prosecutors said. New money went to cover existing shortfalls in One World’s trading account, and tremendous sums were diverted to fuel extravagant lifestyles.

“Credit card and bank records show that Martin spent more than $1 million at a strip club and restaurants, nearly $1 million at elite hotels and another $1 million renting flight time on private jets,” prosecutors said.  “He purchased a fleet of luxury vehicles, donated hundreds of thousands of dollars to celebrity charity events, and hired personal security guards to accompany him in public.”

Walsh also frittered away investors’ funds to live the high life, using his One World “credit card to charge personal expenses, including more than $140,000 of jewelry,” prosecutors said.  “He also used $70,000 in One World funds for country club expenses and $1,425,000 to purchase a second home in Lake Forest.”

About $500,000 from investors was diverted to finance a movie “that had listed Martin as a contributing producer,” prosecutors said.

The FBI and the IRS handled the criminal probe, and the CFTC and NFA assisted, prosecutors said.

In December 2007, the CFTC obtained a trading halt and asset freeze. At the time of the freeze, One World had only $677,932 in assets and unpaid customer liabilities of more than $17.6 million, prosecutors said.

U.S. law enforcement has been counting victims of some individual fraud schemes in the thousands — or even the tens of thousands. The cases present unique logistical challenges because of their size and international reach.

In some scams, criminals have used dozens of shell companies and bank accounts to funnel money, hide it or spirit it away. Reverse-engineering a single scheme can take years.

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One Response to “Illinois Forex Ponzi Schemers Get Combined Prison Sentences Of Nearly 30 Years; Feds Identify More Than 1,000 Victims Of $17 Million Swindle In Which $1 Million Went To ‘Strip Club And Restaurants’”

  1. […] like a personal money supply.  He and partner ran a ponzi scheme that swindled what amounted to $17,000,000 dollars they simply stole from about 1000 victims. Or in other words he and his partner stole $17,000 from each of 1000 people […]