Shipkevich Bitcoin and ICO Attorney
Felix Shipkevich August 2, 2011

David Lewalski has plead guilty to federal mail fraud charges in connection with a $30 million foreign exchange (“forex”) Ponzi scheme through his Florida-based company Botfly LLC. He faces up to twenty years in prison.

Lewalski promised prospective clients monthly returns of up to ten percent, to be compounded monthly, earned through managed forex trading. In this manner, he was able to solicit almost $30 million from the public. Only a small fraction of these funds, about $2.6 million, were ever invested in the forex market. The defendant lost most of this money in unprofitable trading.

However, the vast majority of the invested funds, totaling over $14.3 million, were used in Ponzi payments to other investors. These payments made Lewalski’s trading seem profitable, allowing the ruse to continue. The defendant then misappropriated the balance of the money to pay for personal expenses, including real estate, private jet travel, luxury cars, electronics, and jewelry.

The investigation was led by the Fraud Section of the U.S. Attorney General’s Office and the inter-agency Financial Fraud Enforcement Task Force. Last year, the Florida Attorney General’s Office sued Lewalski and alleged scam partner Jon J. Hammill, ordering Botfly to shut down, freezing its assets, and aiming to recover and return investors’ funds. Thus far, over $5 million has been recovered or frozen and will be available to reimburse investors, according to the Attorney General’s Office. Hammill was indicted in March on bankruptcy fraud charges, and will be in court later this month.

Read more about this forex Ponzi scheme.
Creative Commons License photo credit: decade_null