Two American men, who orchestrated a $30 million fraudulent foreign exchange (forex) trading scheme, have been sentenced to prison for up to five years, the Department of Justice announced.
FX Frauds Get Five Years in Prison
Massachusetts-based Patrick Gallagher, 45, has been sent to jail for five years, while 50-year-old Michael Dion from Florida was sentenced to four years and seven months in prison. Both pled guilty to conspiracy charges to commit securities fraud last September, which contains a maximum prison time of five years.
According to the court documents, Gallagher and Dion operated the forex trading scheme through their company, Global Forex Management. They promised large returns based on fabricated previous returns and told investors that their funds would be traded using an online trading platform provided by a co-conspirator's company, IB Capital.
In reality, Gallagher and Dion stole the investors' funds by working with their co-conspirators in The Netherlands. They effectively stole the $30 million from investors by intentionally creating losing trades in May 2012. They fabricated the massive loss and then routed the money through shell companies set up across the world.
Rampant Frauds across the Globe
The US authorities have been actively busting crypto and other financial fraud that went rampant over the years. Recently, the mastermind behind the EminiFX platform that defrauded thousands of investors for more than $248 million pled guilty to charges. Last December, the US securities regulator charged eight Twitter influencers for using social media platforms Twitter and Discord to manipulate exchange-traded stocks.
Meanwhile, the US is one of many countries where fraudsters are getting caught. In Australia, two Directors of a $180 million forex Ponzi scheme were recently sent to jail for ten years each. Additionally, they were heavily fined for running the scheme for seven years. Most of these schemes have one thing in common: they manipulate investors' greed by promising unrealistic gains.
Most recently, the French financial market regulator warned against fraudulent trading robots targeting residents of French territories, offering annual returns of up to 400 percent.
