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Tag: Safeguard 3030 Investment Club

  • ASD ECHO CHAMBER? Bizarre Ponzi Case That Included Apparent ‘Sovereign Citizens’ And Crackpot Legal Theories Ends With Spectacular Total Of 465 Guilty Verdicts Against Final 2 Defendants

    UPDATED 7:57 P.M. EDT (U.S.A.) It featured a Ponzi huckster touting a can’t-miss earnings scheme in an Internet video. For good measure, it featured apparent “sovereign citizens,” crackpot claims that U.S. law did not apply to the scheme and incongruous claims that the scheme had passed muster with the SEC.

    It also included a failed bid to remove for alleged bias a federal judge presiding over both criminal and civil aspects of the case. Meanwhile, it featured a failed bid to hamstring law enforcement’s efforts to probe a large fraud scheme through assertions that investigators would suffer astronomical financial penalties in court.

    At the same time, it featured claims from supporters that a wrongfully accused promoter-in-chief actually was an astute businessman who’d found a way to provide a legitimate return of 30 percent a month and suggestions that the investigating agents simply were too thick-headed to see the beauty of the computerized business model.

    But it was not the AdSurfDaily autosurf Ponzi case, which has featured similar claims.

    Rather, it was the Forex Ponzi scheme case of Ronald Wade Smith Jr., 36, and Safeguard 30/30 Investment Club — and it has resulted in straight-line wins for federal prosecutors in the Western District of Virginia, including the return last week of a whopping 465 guilty verdicts against Smith’s wife and a fellow promoter.

    Ronald Smith, who came out of the gate loudly protesting the government’s actions, ended up pleading guilty to more than 240 counts of wire fraud, commodities fraud and conspiracy. The guilty pleas followed an earlier claim by Smith that he’d trademarked his name, an apparent bid to stifle scrutiny and chill investigators.

    Any federal agent who used his name in a court document would owe him $50 million for each instance his name appeared, Smith once claimed, according to court filings.

    Smith, according to court filings, also claimed that he had to personally authorize any civil or criminal prosecution against him and that Chief U.S. District Judge James P. Jones had no “authority over him because ‘the Court has authority based on the Constitution’ and he ‘was not party to the signature of the Constitution; therefore, the Constitution doesn’t apply to me unless I choose to sign it.”

    Smith’s wife, Angela Allison Duty Smith, 35, of Davenport, Va., was fund guilty Aug. 4 of 210 counts of wire fraud, 23 counts of money laundering, one count of commodities fraud and one count of conspiracy to commit wire fraud.

    Terrance Keith Cunningham, 39, of Alpharetta, Ga., was found guilty of 210 counts of wire fraud, 17 counts of money laundering, one count of obstruction, one count of commodities fraud and one count of conspiracy to commit wire fraud.

    The verdicts were returned after a nine-day jury trial.

    During the early phase of the criminal case, Ronald Smith’s father-in-law, Charles Duty, testified on Smith’s behalf despite the fact he had given his life savings to Smith and the money could not be accounted for, according to court records.

    Duty, according to court records, testified that “he was confident Smith had properly invested his money and that he believed Smith’s promise of a 30 percent return every 30 days.”

    Prosecutors moved to have Ronald Smith detained pending trial as a flight risk, but Duty said he put up his real estate as security if his son-in-law were freed. Prosecutors also asked that Ronald Smith he subjected to a competency exam. Smith ultimately was ruled competent to stand trial.

    His wife, who joined her father in testifying on Smith’s behalf after Smith claimed he had a personal net worth of $28 billion and owned a company known as Homer Securities that was worth $4 trillion, also joined with her husband in asserting that U.S. law did not apply to the scheme.

    “Both Duty and Angela Smith appear to have fully accepted the defendant’s outlandish theories and I believe they are substantially under the defendant’s control,” Jones ruled in April 2010.

    Like her husband, Angela Smith was charged criminally.

    “This case demonstrates our commitment to prosecute those who prey upon investors with false promises of unreasonably high rates of return,” said U.S. Attorney Timothy J. Heaphy. “While we will continue to identify and apprehend individuals who make these bogus claims, investors need to be vigilant and carefully scrutinize the promises made by individuals seeking to invest their money. The old adage applies: if it sounds too good to be true, it probably is.”

    Cunningham was a pitchman who recruited Safeguard 30/30 investors, according to court filings.

    All in all, investors lost about $1 million in the caper, prosecutors said.

    Cunningham and both Smiths lied about why returns were not being paid to investors, prosecutors said.

    See earlier story.

  • BULLETIN: CFTC Shuts Down Alleged Ponzi Scheme That Pitched Itself On YouTube; Ronald W. Smith Jr. Charged With Operating Forex Fraud; Judge Orders Video To Be Preserved

    Ronald W. Smith used YouTube to promote a Ponzi scheme, according to CFTC.

    In a case that may spread a chill among fraudsters who use YouTube to promote bogus money-making schemes, the Commodity Futures Trading Commission (CFTC) has charged a Virginia man with fraud.

    Ronald W. Smith Jr. of Vansant used a YouTube video to promote a Forex Ponzi scheme that gathered more than $800,000 from 34 investors, CFTC said. In the video, Smith claimed that more than 95 percent of his trades in the “Safeguard 3030 Investment Club” were winning trades and that Safeguard “made a whopping 298 percent in just a mere 17 trading days.”

    The CFTC transcribed the YouTube video and presented it and other investigative materials to a federal judge, who ordered Smith’s assets to be frozen, as well as the assets of Smith’s wife, Angela Smith, and the assets of a company known as Tigre Systems Inc.

    In reality, “Smith used little, if any, of the funds to trade forex,” CFTC said. “Instead, he used customer funds for personal expenses, such as for a pool service, carpeting and furniture.”

    Customer funds also were used for “purported profit payouts” and for business expenses, CFTC said.

    At least one “third party solicitor or marketer” helped Smith sell the scheme, which operated between January 2009 and December 2009, CFTC said. The unnamed person who assisted Smith received more than $157,000.

    Smith also marketed the scheme in Florida, CFTC said.

    Investors’ money was used for personal purchases such as eyewear, clothing, roofing, flooring, furniture and swimming-pool expenses. It also was used for purported business expenses such as payments for hotels, a car and a limousine service.

    Smith issued false account statements, which prompted some customers to give him more money, CFTC said.

    The scheme began to collapse in October 2009, and Smith told customers he could not pay them because of a “purported on-going investigation by the SEC,” CFTC said.

    That claim was false, CFTC said.

    In December, Smith told customers he had been cleared of any wrongdoing in the “purported” SEC probe.

    That claim was false, CFTC said.

    In January 2010, CFTC said, Smith told customers their payments were being held up by a bank.

    That claim, too, was false, CFTC said.

    Smith had never been registered with CFTC in any capacity, the agency said.

    U.S. District Judge James P. Jones issued the asset freeze and an order prohibiting the destruction of documents, including the YouTube video and other evidence.