Chicago, IL – Jeffery Alan Lowrance, formerly of Houston, Texas, has been slapped with a default judgment and permanent injunction following a fraudulent foreign currency scheme, according to a U.S. Commodity Futures Trading Commission (CFTC) announcement on November 4, 2011.
Lowrance, along with his New Zealand-based company First Capital Savings and Loan, is jointly and severally liable for a $3.3 million civil monetary penalty and $1.2 million in restitution. The judgment, entered by Judge Elaine E. Bucklo of the U.S. District Court for the Northern District of Illinois, stems from a scheme that defrauded at least 36 investors.
From June 2008 through February 2011, Lowrance and First Capital allegedly lured investors with false promises of high returns – between 1.1 and 4.15 percent monthly – on forex trades. They bolstered these claims with fabricated account statements posted on their website. However, the CFTC found that customer funds were never actually used for trading. Instead, they were misappropriated to fund a religious newspaper, support Lowrance’s family, cover his personal expenses, and pay existing investors, effectively operating a Ponzi scheme.
This CFTC action isn’t Lowrance’s only legal trouble. The U.S. Attorney’s Office for the Northern District of Illinois previously indicted him for a $25 million fraud scheme and successfully extradited him from Peru. Additionally, the U.S. Securities and Exchange Commission filed a related case against Lowrance and First Capital in California on July 14, 2011.
The court order also includes permanent bans on Lowrance and First Capital from engaging in trading or registration activities. Furthermore, any entities providing web-hosting or domain registration services are required to remove websites used to solicit investors for commodity futures or forex trading.
The CFTC investigation was led by Jennifer S. Diamond, Elizabeth M. Streit, Joy McCormack, Scott R. Williamson, Rosemary Hollinger, and Richard B. Wagner of the Division of Enforcement.
Source: CFTC.gov
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