Donovan Davis Jr, Forex Fraud, Florida 2009

PALM BAY, FL – Donovan Davis Jr., along with three associates, has been charged with orchestrating a $17 million fraudulent commodity scheme targeting approximately 100 investors, according to a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC). The charges were filed on March 23, 2009, in the U.S. District Court for the Middle District of Florida, and an asset freeze was immediately ordered by Judge John Antoon II.

Davis Jr., of Palm Bay, Florida, is accused of running the scheme alongside Blayne Davis of Naples, Florida, and Damien Bromfield of Ocoee, Florida. The operation involved soliciting funds from investors with the promise of profits from foreign currency (forex) futures and options trading through the CBM FX Fund, LP. However, the CFTC alleges the defendants never pooled the funds as advertised.

Instead, the complaint details how the defendants diverted investor money into personal expenditures, including luxury vehicles, private jet rentals, and a $40,000 spending spree at a gentlemen’s club. Of the $17 million collected, approximately $7 million was lost through trading, while a substantial portion remains unaccounted for.

To maintain the illusion of success, Davis Jr., Blayne Davis, and Bromfield allegedly provided investors with fabricated account statements, falsely reporting consistent monthly profits of up to 7% for a year-long period (September 2007 – August 2008). The CFTC asserts that the defendants’ actual trading activities resulted in monthly losses throughout that same period.

The CFTC also named Nakano Capital Partners, LP, Nakano Capital Advisors, LLC, and Nakano Capital Management, LLC as relief defendants, alleging that Blayne Davis transferred over $135,000 of investor funds to accounts held by these entities, which provided no legitimate services to the FX Fund.

The CFTC is seeking restitution, disgorgement of profits, civil monetary penalties, and permanent trading injunctions against the defendants. The investigation received assistance from the National Futures Association and the State of Florida Office of Financial Regulation in Orlando, Florida.

The case is being pursued by Daniel Jordan, Kenneth McCracken, Michael Loconte, and Rick Glaser of the CFTC’s Division of Enforcement.

Source: CFTC.gov

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