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Alleged forex markets fraudster arrested in US over Ponzi scheme claims

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ponzi schemeAn American man who allegedly ran a foreign currency Ponzi scheme which ripped off investors to the tune of almost one million US dollars has been taken into custody.

Thomas Lanzana, who was formerly of the state of New Jersey but now lives in South Carolina, allegedly told at least 20 possible customers that his foreign currency products were very successful.

However, according to allegations from the Department for Justice (DoJ), the reality is that his scheme was a fraud and that in some cases he used the deposited funds to either pay himself or pay back earlier investors as false profits.

Allegedly, he used other deposits from investors to buy items for himself including purchases from online retailer Amazon, car dealers and more.

According to the DoJ, Lanzana, who spent time living in New Jersey’s Bergen County but was arrested in Park City in the state of Kansas, began his scheme as early as five years ago.

“As early as 2013, Lanzana fraudulently solicited approximately $900,000 from at least 20 customers to invest in algorithm-based trading pools in foreign currency derivatives (forex) and other financial instruments”, the DoJ’s statement said.

He is also believed to have created a number of fake documents which supported his position, including fake tax documents and mocked-up account balances which did not reflect the reality of the situation.

“He falsely claimed to prospective customers that he was a successful forex trader. Lanzana allegedly took several steps to keep his customers’ trust: he sent them false account statements; he posted false monthly account statements to his companies’ websites showing balances, some in excess of $800,000, for forex trading accounts that did not exist; and he sent false tax documents to customers reporting earnings that did not exist”, the DoJ continued.

“Lanzana misappropriated at least $350,000 in customer funds, using some to repay earlier investors in the manner of a Ponzi scheme, and to pay for his personal expenses, including purchases on Amazon, payments to a luxury car dealer and a jewellery retailer, and golf expenses”, it added.

Lanzana now faces a number of sentencing options if he is found guilty. He faces a charge of mail fraud, and if he is convicted of this, then he could face 20 years in jail in addition to a fine of $250,000 – or twice the gross gain or loss his alleged fraud led to.

He also faces a count of commodities fraud, which carries a ten year prison sentence as well as a fine of $1 million (or, again, twice the gross gain or loss).

A number of officers have worked on the case. In a statement, US Attorney Carpenito thanked some of the Federal Bureau of Investigation’s special agents, including Special Agent in Charge Gregory W. Ehrie, as well as some of the special agents of the IRS-Criminal Investigation group.

The Commodity Futures Trading Commission’s Division of Enforcement is also believed to have assisted.

Assistant US Attorney David W. Feder of the US Attorney’s Office’s Cyber Crime Unit will lead the case for the prosecution.