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.