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Tag: Sidney S. Hanson

  • 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.

  • FLORIDA — AGAIN: CFTC Charges Sunshine State Couple Amid Spectacular Allegations They Posed As Forex Experts, Targeted Seniors And Handed Off More Than $22 Million To Man Who Was Trying To Cover Up Previous Ponzi Scheme

    Gary and Brenda Martin of St. Augustine, Fla., posed as Forex dealers and experts, operated a website advertising their purported expertise, bragged about the talents of their unqualified sales “consultants” — and collected more than $22 million in an incredibly elaborate fraud scheme, the CFTC has charged.

    Neither of the Martins was registered with the CFTC. In fact, the agency said, they had “no expertise or experience in trading forex or any other commodity” and had “no trading accounts.”

    “[N]o forex trading occurred and no profits were ever realized,” the CFTC said.

    Unbeknown to customers, what the Martins did, according to the CFTC’s disturbing allegations, was funnel money from their customers to Sidney S. Hanson.

    Hanson, in turn, paid the Martins “referral fees” of up to 5 percent, based on the sums the Martins’ customers provided the couple. In this way, the Martins racked up $1.44 million in undisclosed commissions paid by Hanson, while the Martins’ customers believed they were doing business with the couple.

    And just who is Sidney S. Hanson?

    Why, Sidney S. Hanson is none other than the Sidney S. Hanson charged criminally in North Carolina by the Feds two years ago in a money-laundering, wire-fraud and securities-fraud case that alleged he was operating schemes dating back at least to 2000.

    And Sidney S. Hanson is the same Sidney S. Hanson charged in this companion action by the SEC in 2009. Also charged in the SEC case was Charlotte Hanson, Sidney Hanson’s wife. The CFTC also charged the Hansons in 2009.

    The first scheme was a loan scheme known as Apollo Trust, which promised “extraordinary rates of return,” according to federal prosecutors.

    Apollo, the CFTC said, was a Ponzi scheme — and a new scheme known collectively as the Queen Shoals Group emerged to cover the Apollo fraud.

    Along the way, customers’ money was used to finance “luxury resort vacations, private plane rentals, daily living expenses, and the purchase of an 88 acre farm,” the CFTC said in 2009.

    Sidney Hanson is scheduled to be sentenced on the criminal charges March 31.

    The Martins operated a Queen Shoals website and a Florida company known as Queen Shoals Consultants LLC, the CFTC said.

    They “simply” turned over huge sums to Hanson to plumb a commission, the CFTC charged.

    When Gary Martin was asked what Hanson did with the money, he replied, “I don’t know,” the CFTC charged.

    And this occurred after the Martins assured their customers that they were Forex experts with “vast experience.”

    Retirees and persons nearing retirement were lured into the scheme with the promise of high profits, the CFTC charged.

    “The Martins allegedly targeted customers at or near retirement who held individual retirement accounts (IRAs), luring them with promises of guaranteed annual returns of between eight to 24 percent generated by trading forex and other instruments,” the CFTC charged.  “The Martins also guaranteed an’ additional 1%’ to customers who held IRAs and agreed to rollover their IRAs into the defendants’ scheme.”