Midland, North Carolina – Bruce C. Kramer, 51, was charged with massive fraud related to a foreign currency exchange (forex) scheme, the U.S. Commodity Futures Trading Commission (CFTC) announced March 18, 2009. Kramer, along with his company Barki, LLC of Mint Hill, North Carolina, allegedly defrauded at least 79 investors out of $40 million between June 2004 and February 2009.
The CFTC complaint details a Ponzi scheme where Kramer and Barki, LLC solicited funds for forex trading, promising monthly returns of 3-4% with minimal risk. However, the defendants reportedly sustained trading losses exceeding $10 million and used approximately $20 million in new customer funds to pay existing investors – a classic hallmark of a Ponzi scheme. The remaining $10 million was allegedly used for personal expenses, including a $1 million horse farm, luxury vehicles, artwork, and lavish parties.
The scheme unraveled on February 25, 2009, when Kramer committed suicide. Prior to his death, and in response to increased scrutiny following media coverage of other Ponzi schemes, Kramer fabricated trading records claiming a $59 million account balance. In reality, the accounts held $1 million or less, with only $575,000 remaining as of the filing date.
On March 17, 2009, U.S. District Court Judge Graham C. Mullen for the Western District of North Carolina issued an order freezing the assets of Kramer, Barki, LLC, and relief defendants Rhonda Kramer (Bruce Kramer’s wife) and Forest Glenn, LLC (the horse farm). A receiver, Charles E. Lyons, Esq., was appointed to oversee the recovery of assets for defrauded customers, who can be contacted at (704) 377-5050.
The CFTC is seeking preliminary and permanent injunctions against further fraudulent activity, the return of funds to investors, disgorgement of ill-gotten gains, and civil monetary penalties. The investigation was conducted in coordination with the Federal Bureau of Investigation.
Source: CFTC.gov
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