The CFTC has filed an enforcement action against Michigan resident Jeffrey L. Groendyke for his business dealings via the JG Forex Fund (JGF). The complain alleges that JGF was a Ponzi scheme, and Groendyke has been charged with fraud and misappropriation of funds. The scheme stole over $900,000 from 54 investors. At the same time the charge was laid, a federal judge issued an order freezing his assets and preventing the destruction of his records.
The charges against Groendyke stipulate that, beginning in May 2010, he used $600,000 of the money invested with JGF for purposes unrelated to forex trading–for example, to pay off other investors’ “profits” and to trade futures in his own personal account. Furthermore, Groendyke was so hapless a trader that the he lost 88% of the meager funds actually used in forex trades and at no point did he ever register in any capacity with the CFTC.
According to the complaint, Groendyke solicited investment primarily from individuals he knew at his local church. He told them he was a reputable trader and that his firm was a solid, long-term investment. To perpetuate the scheme, he issued false account statements, for example claiming he had over a million in funds as of December 2010, when in fact he had less than $100.
