GUNTER, TX – Larry Benny Groover, 51, was ordered to pay $2.69 million in restitution and penalties after being found liable for defrauding customers through a foreign currency (forex) Ponzi scheme, the Commodity Futures Trading Commission (CFTC) announced today.
The federal court order, entered on January 4, 2012, by Judge Richard A. Schell of the U.S. District Court for the Eastern District of Texas, Sherman Division, permanently prohibits Groover from engaging in similar fraudulent activities. The order also requires Groover, and his wife Joanne Groover – named as a Relief Defendant – to disgorge $44,890 in ill-gotten gains received as a result of the scheme.
According to the CFTC, from June 18, 2008, to February 4, 2010, Groover of Gunter, Texas, solicited approximately $1.4 million from customers for forex trading. Instead of legitimately trading the funds, Groover commingled customer money with his and his wife’s personal accounts.
The investigation revealed that Groover used approximately $647,500 of the solicited funds for forex trading, resulting in a loss of roughly $600,000. Rather than admitting his losses, Groover operated a Ponzi scheme, using new customer funds to make payments to earlier investors. He also allegedly used the money to cover personal expenses, including health and medical care, cable television, groceries, dining, auto repair, gasoline, and insurance. Funds were also used for trading software and publications, and direct payments to himself and Joanne Groover.
The CFTC acknowledged the assistance of the Financial Services Authority of the United Kingdom, the Australian Securities and Investment Commission, the Texas State Securities Board, and the Collin County District Attorney’s Office in the investigation.
The case was led by CFTC Division of Enforcement staff members Jeff Le Riche, Jenny Chapin, Jo Mettenburg, Steve Turley, Richard Glaser, and Richard Wagner.
The order was issued on January 5, 2012.
Source: CFTC.gov
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