The CFTC and SEC have both filed charges against Jeffery Alan Lowrance (formerly of Texas) and his New Zealand-based firm First Capital Savings and Loan. Both agencies allege that Lowrance ran a million-dollar Ponzi scheme via First Capital, fraudulently soliciting and subsequently misappropriating money ostensibly to be traded in off-exchange foreign currency exchange (“forex”) contracts. Lowrance fled the country last August after he was charged in connection with another forex fraud scheme, and was extradited from Lima, Peru late last week.

According to the CFTC and SEC, from 2008 to the present the defendants solicited at least $1 million from thirty-six individuals by promising them monthly returns of 1.1-4.5% on their investment, to be generated by successful forex trading. Not only was Lowrance not an experience forex trader, he never actually attempted to trade any of it. Instead, he used the funds to make Ponzi payments to earlier investors, for personal expenses, and to fund a religious newspaper called USA Tomorrow. To deceive investors, he gave them access to fake account statements showing the promised returns.

Last August, Lowrance was hit with federal fraud charges for his association with First Capital and an earlier project, Mentor Investing Group Inc. He fled the country and lived as a fugitive until police arrested him in Lima, Peru in February. He was extradited to face forex fraud charges in the United States late last week.

The CFTC and SEC are seeking disgorgement of ill-gotten gains, restitution, civil monetary penalties, and trading and registration bans.

Read more about this CFTC enforcement action.

Read more about this SEC enforcement action.
photo credit: banspy