Charlotte, NC – August 8, 2011 – Gary D. Martin and his wife, Brenda K. Martin, of St. Augustine, Florida, have been permanently banned from trading and registration in commodity futures after being found to have defrauded customers in a foreign currency (forex) scheme, the U.S. Commodity Futures Trading Commission (CFTC) announced today.
The federal court consent order, entered by Chief Judge Robert J. Conrad, Jr. of the U.S. District Court for the Western District of North Carolina, also applies to the Martins’ company, Queen Shoals Consultants, LLC (QSC). The order mandates full restitution to all individuals who invested with the defendants between at least June 18, 2008 and August 7, 2009. A civil monetary penalty will be determined at a later date through agreement between the CFTC and the Martins.
The CFTC originally filed a complaint on March 15, 2011, alleging that the Martins and QSC fraudulently solicited approximately $22.3 million from investors with promises of forex trading opportunities. The solicitation occurred through in-person meetings, written materials, a company website, and third-party agents.
According to the court order, the Martins falsely claimed to have “a vast background in financial services” and over 20 years of experience, boasting a team of experts to assist customers. However, the defendants possessed no actual expertise in forex trading and all representations of guaranteed profits were false. Gary Martin admitted under oath that no forex trading or investing was ever conducted on behalf of customers and that no such accounts existed.
The order further revealed that the Martins secretly transferred all customer funds to Sidney S. Hanson in exchange for referral fees of up to five percent of each investor’s contribution. The Martins received at least $1.44 million in these undisclosed fees. Hanson was previously charged by the CFTC with operating a Ponzi scheme related to off-exchange forex trading and subsequently pled guilty to securities and mail fraud. He was sentenced to 22 years in prison and ordered to pay $33 million in restitution in April 2011.
The North Carolina Department of the Secretary of State, Securities Division, assisted the CFTC in this matter.
Source: CFTC.gov
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