SIDNEY AND CHARLOTTE HANSON FOREX PONZI: Federal Judge Orders Orders Tens Of Millions Of Dollars In Restitution, Penalties And Disgorgement

Screen shot from federal court files: These relief defendants -- all of which were Delaware companies tied to a North Carolina Ponzi scheme that also reached into Florida and Nevada -- were ordered to disgorge more than $22 million in ill-gotten gains. Law enforcement increasingly is encountering fraud schemes that use shells in multiple jurisdictions to keep money flowing.

U.S. District Judge Robert J. Conrad Jr. of the Western District of North Carolina has ordered tens of millions of dollars in restitution, penalties and disgorgement in the civil Ponzi case against Sidney and Charlotte Hanson. The CFTC charged the North Carolina couple and their “Queen Shoals” companies in 2009, alleging a Forex Ponzi scheme aimed at the individual retirement accounts of seniors and people near retirement age.

The Hanson scheme has been tied to firms in Nevada and Delaware — and also operators in Florida, Gary D. Martin and his wife Brenda K. Martin, who drove cash to themselves and the Queen Shoals entities and recruited pitchmen.

Sidney Hanson, 64, is serving a 22-year prison sentence in the same North Carolina facility that houses Bernard Madoff. As the Hanson events infolded, investigators — including an undercover investigator for the state of North Carolina — discovered schemes within schemes that targeted older investors and people of faith in a complex caper involving companies with high-sounding names.

The Hansons used proceeds from the scheme to purchase an 88-acre farm, use private planes and take luxury vacations, the CFTC said. They also lived in a property “owned” by Queen Shoals.

Conrad ordered restitution by the firms and the Hansons of $23 million, plus interest, and an interest-accruing civil penalty of $1.2 million. Various relief defendants were ordered to disgorge more than $22 million in ill-gotten gains.

Among the complexities of the case — which investigators reverse-engineered — were the corporate set-ups of the Queen Shoals and related firms and their reach across multiple jurisdictions.

Queen Shoals LLC, for instance, was formed in Nevada, but operated from North Carolina. Queen Shoals II LLC was formed in Delaware, but also operated from North Carolina — in the same purported Charlotte “suite” from which the original Queen Shoals operated.

Select Fund LLC also was formed in Delaware, but used the Charlotte “suite.”

The relief defendants — Secure Wealth Fund LLC, Heritage Growth Fund LLC, Dominion Growth Fund LLC, Two Oaks Fund LLC, Dynasty Growth Fund LLC and Queen Shoals Group LLC — all were formed in Delaware.