Belize, Israel, Switzerland, Canada And United States Cooperate In Case That Leads To Judgment Against Florida-Based Company Posing As ‘Offshore’ Investment Firm

EDITOR’S NOTE: Members of Florida-based AdSurfDaily and a closely connected autosurf firm, AdViewGlobal, purportedly based in Uruguay, may find this story particularly eye-opening.

Play the autosurf or “offshore” HYIP investment games? Buy into the hype that overseas “registration” provides “shelter?” Pose as an “expert” on the Ponzi and HYIP boards and tell your downline members or recruits that new entities you’re promoting learned from the mistakes of companies “stupid” enough to have conducted business from the United States?

Position yourself as uniquely knowledgeable and use phrases such as “due diligence,” perhaps adding that “offshore” programs are “safe” — unlike those U.S.-based programs that are only asking for trouble?

You’re going to need some new lines to disarm the doubting customers you’re trying to recruit into your scams so you can pocket commissions based on their misery.

Indeed, this is a story about a spinoff company that purportedly opened “offshore” after a previous company controlled by the husband of the operator got caught ripping off customers on U.S. domestic soil. Like the U.S.-based company that got caught fleecing clients, the new, “offshore” firm also got caught — and investigators say it was not “offshore” at all.

In fact, it was operated right from sunny Florida. Both the domestic company and the “offshore” spinoff walked off with the money, investigators said.

The U.S. Commodity Futures Trading Commission (CFTC) has announced that it worked proactively with Belize, Canada, Switzerland and Israel in a case that resulted in a judgment against a Belize-registered company operating a commodity-options scam from Hollywood, Fla.

The company simply vanished one day, taking clients’ money with it, investigators said.

U.S. District Judge Paul C. Huck of the Southern District of Florida ordered defendants Zurich Futures and Options Inc. and Michele LaBruce — both of Hollywood — to pay more than $5.4 million in restitution and penalties.

Huck gave them 10 days to do so, saying post-judgment interest will begin to accrue on the 11th day.

Specifically, Huck found that Zurich Futures was not headquartered in Switzerland and did not have a satellite office in Toronto, as it had claimed. Rather, the company used a “mail drop” and “virtual offices” to reroute mail and telephone calls to southern Florida.

“At least” 60 individuals sent a total of “at least” $1.45 million to the firm, according to Huck, who entered the findings of fact and conclusions of law when the defendants didn’t even bother to enter a defense.

“Almost all of the Defendants’ customers lost their money trading through Zurich, while Zurich collected at least $1,357,299 in commissions and fees,” Huck said.

Despite a claim that Zurich had been in business for a decade and employed only registered and licensed traders, Zurich had been operating for less than a year and had lied about its credentials, Huck ruled.

In fact, the judge ruled, LaBruce “directed the transfer of funds totaling at least $1,071,199 from Zurich’s bank accounts to herself.”

CFTC minced no words in describing the Zurich Futures scam.

“Zurich was nothing more than a Hollywood, Fla.-based sham operation,” the agency said.

Moreover, the agency added, LaBruce is the wife of Adam Leon, against whom CFTC won a judgment and penalties totaling $2.5 million in a foreign-currency trading scheme known as “Presidential FX Inc.”

The Presidential FX scam was exposed in 2005. Leon was one of seven people charged criminally in September 2008. The others were Phillip Eric Mickelberg, Mitchell Goldberg, Joseph Marchiano, Donnetta Bass, Danielle Williamson, and Melody Marks.

Other companies involved in the Presidential FX scam included Emerging FX; Infinity FX; and Noble4X, federal prosecutors said. All of the companies operated from Hollywood.

During a seven-month stretch between December 2003 and June 2004, CFTC said, 99.1 percent of customers who invested money with Presidential FX lost it.

Presidential FX was charged civilly by CFTC in August 2005. While the case was still in the courts in January 2006, Leon failed to respond to an order compelling discovery and an order to be deposed. The deadline to respond was Jan. 17, 2006. On that very same day, Zurich Futures was incorporated in Belize, according to court records. On the next day, Jan. 18, 2006, LaBruce was appointed “Attorney-in-Fact” for Zurich Futures.

On Feb. 17, 2006, Leon stipulated to default through counsel in the Presidential FX case, meaning he abandoned the case.

Court records suggest Zurich Futures, with Leon’s wife Michele LaBruce in charge, commenced operations in April 2006, just two months after Leon’s default in the Presidential FX case. LaBruce also is named in court documents as a one-time principal in Presidential FX.

CFTC thanked the international regulatory community for assisting in the Zurich Futures probe.

“The CFTC gratefully acknowledges the assistance of the Belize Financial Intelligence Unit, the Ontario Securities Commission, the Swiss Federal Market Supervisory Authority and the Israel Securities Authority in investigating this matter,” CFTC said.