The CFTC has obtained an order requiring Ray White and CRW Management, as well as relief defendants Christopher White and Hurricane Motorsports, to pay millions in disgorgement and civil monetary penalties in connection with an off-exchange foreign exchange (“forex”) Ponzi scheme.
According to the CFTC, from November 2006 to November 2008 White and CRW Management told customers that the firm was able to generate astounding returns for investors, averaging 5-8% a week. Annually, such returns would add up to an unfathomable 260-416%. In this manner, the defendants were able to solicit over $11.9 million from about 411 customers. Though the money was purportedly to be used to invest in forex accounts, CRW never actually traded forex, and White lost the money (less than $100,000) he did invest in forex. White misappropriated the remaining millions. To disguise the fraud and perpetuate the scheme, White created false account statements and make Ponzi payments to early investors.
The relief defendants were named in the enforcement action because they received funds that the defendants acquired through fraudulent actions, and had no legitimate entitlement to those funds. A series of earlier consent orders permanently barred the defendants from engaging in any commodities-related activity, or ever registering with the CFTC, and required the relief defendants to disgorge nearly $400,000, and give up rights to other assets, including real estate. Ray White was also accused of commodities fraud by President Obama’s Financial Fraud Enforcement Task Force, where he pleaded guilty and was sentenced to ten years in federal prison.