It was one of my first stories on Forex Magnates, I indicated that David Smith from notorious Olint (an alleged forex Ponzi scheme which bilked investors out of almost $1 billion) was linked to I Trade, a former US forex broker.
A few days ago United States District Court indicted David Smith with four counts of wire fraud, one count of conspiracy to commit money laundering and 18 counts of money laundering to conceal specified unlawful activity. The US authorities are also seeking to seize US$128-million which they claim Smith gained through wire fraud. They have also requested the court to allow them to seize a premise in Florida which Smith purchased allegedly with criminal proceeds, plus precious gemstones, precious metals, jewelry and other property which are owned by Smith. You can read the full document below.
What is however interesting is the connection between David Smith (Olint) and I Trade (now known as eforex) which is managed by the Martinez bunch. Back in 2007 David Smith was listed as I Trade's principal by the NFA having contributed almost 100% of its capital. It seems he financed this whole forex ponzi eco-system. David Smith then solicited investors to invest money in his Olint (and related companies scheme) and opened accounts with I Trade promising over 6,000 investors 5-10% in monthly gains. Subsequently all the money was lost.
I Trade was fined $250,000 by the NFA following failure to implement adequate AML procedures (probably related to the Olint case) and then immediately has winded down its business in the US just to reemerge as eforex.com a month later (talking about forex phoenixes). One may think there might be a relation between the Olint debacle and this sudden business shift. Both I Trade and eforex are run by the Martinez family who are also behind the Market Traders Institute. This very Institute was said to have helped David Smith with his forex ponzi scheme. Do you connect the dots now?
This is a striking resemblance to a more known forex scheme, one by Trevor Cook and Crown Forex. Trevor Cook was sentenced to 25 years in prison and Crown Forex is still in process of liquidation. Trevor Cook owned some/all of Crown Forex and solicited his clients to open Forex Trading accounts with this firm. Not surprisingly, all the money was lost.
Check out Orlando TV's video report about this case. They went to Market Traders but were not allowed in but managed to talk to some people scammed by Olint.
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