Jamaican Citizen Pleads Guilty to $220 Million Ponzi Fraud and Money Laundering Charges
ORLANDO, FL—United States Attorney Robert E. O'Neill announces that David A. Smith, (41, a Jamaican citizen) who was living in the Turks and Caicos Islands, today pleaded guilty to four counts of wire fraud, one count of conspiracy to commit money laundering, and 18 counts of money laundering. The wire fraud counts carry a maximum penalty of 20 years in federal prison, a fine of $250,000, and a term of supervised release of not more than three years. In addition, for each count of wire fraud the fine may be assessed at twice the amount of gross gain or loss.
Last year, Smith pleaded guilty to fraud and conspiracy charges filed in the Turks and Caicos Islands arising from his investment scam there, and he was sentenced to serve six-and-a-half years in prison.
An information charging Smith with these offenses was filed by the United States Attorney on August 18, 2010. In November 2010, he was brought to the United States. His initial appearance in Federal District Court in Orlando was on November 19, 2010. The case was set for trial in April 2011.
According to the plea agreement, for more than three years, Smith executed a Ponzi scheme to defraud over 6,000 investors located in the Middle District of Florida and elsewhere out of more than $220 million. Smith led investors to believe that he was investing their money in foreign currency trading, earning 10 percent per month on average. In fact, he was not trading their funds. Foreign currency trading is a highly volatile and risky investment vehicle that is regulated in the United States by the Commodity Futures Commission and the National Futures Association.
In addition to defrauding those investors, Smith conspired to launder the proceeds that were received in his scam, and he participated in the laundering of millions of dollars of proceeds that were obtained as a result of wire fraud.
The four counts of wire fraud are based on Smith’s transmitting false and fraudulent account statements to several investors through email and the OLINT Internet website.
Smith also conspired with others to launder approximately $128 million of proceeds that were obtained as a result of the wire fraud scheme, and he in fact laundered those millions of dollars. The purpose of the money laundering engaged in by Smith and his conspirators was to conceal and disguise the nature, the location, the source, the ownership, and the control of the proceeds of the wire fraud.
During the entire time that Smith operated his Ponzi scheme, the only source of income for he and his wife was from investors’ funds. Smith’s operation of the Ponzi scheme effectively ended on July 15, 2008, when the Royal Turks and Caicos Police Force, Financial Crimes Unit, executed search warrants at Smith’s place of business and residence in Providenciales, Turks and Caicos Islands.
The U.S. Attorney’s Office wishes to acknowledge that considerable investigative support has been and continues to be provided by foreign law enforcement agencies and governments, including the Financial Crimes Unit with the Royal Turks and Caicos Police Force, the Financial Services Commission in Jamaica, the Special Investigation and Prosecution Team in Turks and Caicos, and the governments of the United Kingdom, Turks and Caicos, and Jamaica. Additional support has been provided by the United States’ Commodity Futures Commission and the National Futures Association.
Any person who believe to be a victim and wishes to submit a claim for restitution may contact the U.S. Attorney’s office through a special e-mail account: david_Smith_ponzi@usdoj.gov.
This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Internal Revenue Service, and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Bruce S. Ambrose.
Last year, Smith pleaded guilty to fraud and conspiracy charges filed in the Turks and Caicos Islands arising from his investment scam there, and he was sentenced to serve six-and-a-half years in prison.
An information charging Smith with these offenses was filed by the United States Attorney on August 18, 2010. In November 2010, he was brought to the United States. His initial appearance in Federal District Court in Orlando was on November 19, 2010. The case was set for trial in April 2011.
According to the plea agreement, for more than three years, Smith executed a Ponzi scheme to defraud over 6,000 investors located in the Middle District of Florida and elsewhere out of more than $220 million. Smith led investors to believe that he was investing their money in foreign currency trading, earning 10 percent per month on average. In fact, he was not trading their funds. Foreign currency trading is a highly volatile and risky investment vehicle that is regulated in the United States by the Commodity Futures Commission and the National Futures Association.
In addition to defrauding those investors, Smith conspired to launder the proceeds that were received in his scam, and he participated in the laundering of millions of dollars of proceeds that were obtained as a result of wire fraud.
The four counts of wire fraud are based on Smith’s transmitting false and fraudulent account statements to several investors through email and the OLINT Internet website.
Smith also conspired with others to launder approximately $128 million of proceeds that were obtained as a result of the wire fraud scheme, and he in fact laundered those millions of dollars. The purpose of the money laundering engaged in by Smith and his conspirators was to conceal and disguise the nature, the location, the source, the ownership, and the control of the proceeds of the wire fraud.
During the entire time that Smith operated his Ponzi scheme, the only source of income for he and his wife was from investors’ funds. Smith’s operation of the Ponzi scheme effectively ended on July 15, 2008, when the Royal Turks and Caicos Police Force, Financial Crimes Unit, executed search warrants at Smith’s place of business and residence in Providenciales, Turks and Caicos Islands.
The U.S. Attorney’s Office wishes to acknowledge that considerable investigative support has been and continues to be provided by foreign law enforcement agencies and governments, including the Financial Crimes Unit with the Royal Turks and Caicos Police Force, the Financial Services Commission in Jamaica, the Special Investigation and Prosecution Team in Turks and Caicos, and the governments of the United Kingdom, Turks and Caicos, and Jamaica. Additional support has been provided by the United States’ Commodity Futures Commission and the National Futures Association.
Any person who believe to be a victim and wishes to submit a claim for restitution may contact the U.S. Attorney’s office through a special e-mail account: david_Smith_ponzi@usdoj.gov.
This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Internal Revenue Service, and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Bruce S. Ambrose.
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