Judges Across United States Hammer Forex Ponzi-Schemers And Commodities Fraudsters; Nearly $100 Million In Penalties Announced Last Week Alone

Federal judges in California, New York, Tennessee and Arizona last week ordered spectacular financial penalties against Forex and commodities fraudsters.

Dennis R. Bolze was assessed a penalty of more than $36.6 million and ordered to pay restitution of more than $13 million to investors he scammed. The orders were entered by Chief U.S. District Judge Curtis L. Collier of the Eastern District of Tennessee.

Bolze was sentenced last year to more than 27 years in federal prison by U.S. District Judge Thomas A. Varlan, also of the Eastern District of Tennessee.

Meanwhile, Robert D. Bame was assessed restitution and a financial penalty totaling $46.9 million by U.S. District Judge R. Gary Klausner of the Central District of California.

In May 2009, Bame was sentenced to 97 months in federal prison for wire fraud and engaging in monetary transactions with property derived from specified unlawful activity.

The cases against Bame and Bolze alone resulted in monetary sanctions of more than $96.6 million.

Separately, a restitution order and penalty totaling more than $1.1 million was entered against Helmut H. Weber by U.S. District Judge David G. Campbell of the District of Arizona. Weber was indicted in October 2008 by state authorities for fraud and the misappropriation of customer funds.

In New York, meanwhile, Jeffrey Shalhoub was ordered to pay more than $700,000 in restitution and penalties. Those orders were entered by U.S. District Judge Joanna Seybert of the Eastern District of New York.

The CFTC, which brought the civil cases against each of the defendants referenced in this story, said Shalhoub ran a Ponzi scheme, using customers’ money to “pay for computer and golfing equipment, clothing, car payments on a Land Rover and a $3,500 tab at a Manhattan restaurant.”

Bolze, one of the earliest of the so-called “mini-Madoffs,” also ran a Ponzi scheme. Bolze bolted from Tennessee in December 2008, the same month the Madoff Ponzi was exposed.

After his arrest in Pennsylvania, Bolze asked for an opportunity to recoup the money he had fleeced from victims. All he needed, he argued to a federal judge, was the Internet, a computerized program — and a little time.

Bame, the CFTC said, “diverted about $19 million of investors’ money either to pay off other investors or for his personal use, such as purchasing automobiles or traveling in private jets.”

In the case of Weber, the CFTC said, “the majority of the funds were misappropriated to pay for [his] lavish lifestyle.”