Brad Lee Demuzio, of Chubbuck, Idaho, has been charged with operating a $1.8 million Ponzi scheme that defrauded investors of approximately $900,000, according to a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC) on April 11, 2012, in the U.S. District Court for the District of Idaho.
Demuzio, operating through his company Demuzio Capital Management, allegedly solicited funds from at least 16 participants between June 2008 and November 2011, promising profits through off-exchange foreign currency (forex) trading. However, the CFTC alleges that Demuzio only traded a portion of the invested funds, incurring substantial losses, while falsely reporting profits to investors via monthly emails.
The CFTC complaint details that Demuzio misappropriated roughly $700,000 of investor funds for personal expenses, including mortgage payments, dining, and retail purchases. When investors requested the return of their principal, Demuzio allegedly fabricated official-looking letters from the CFTC, falsely claiming the funds were frozen due to a nonexistent investigation, and later, that the investigation had been dismissed.
Federal authorities say Demuzio confessed to his role in the scheme and the fabrication of the CFTC documents during an interview with Special Agents of the Federal Bureau of Investigation in February 2012. A federal grand jury subsequently indicted Demuzio on April 11, 2012, on five counts of wire fraud. Demuzio and Demuzio Capital Management were not registered with the CFTC.
The CFTC worked in conjunction with the FBI on this case. The investigation was led by CFTC staff members Lara Turcik, Christopher Giglio, Lulu Quitasol, Manal M. Sultan, Lenel Hickson, Jr., Stephen J. Obie, and Vincent A. McGonagle.
Source: CFTC.gov
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