GUNTER, TX – February 17, 2011 – Larry Benny Groover, of Gunter, Texas, is facing federal charges following a U.S. Commodity Futures Trading Commission (CFTC) investigation into a $1.4 million foreign currency (forex) Ponzi scheme. The CFTC obtained a federal court order on February 11, 2011, freezing Groover’s assets and prohibiting the destruction of financial records.
According to the CFTC’s anti-fraud complaint, filed in the U.S. District Court for the Eastern District of Texas, Groover misappropriated over $750,000 from at least 22 customers between June 18, 2008, and February 4, 2010. He allegedly used the funds to pay earlier investors – a hallmark of a Ponzi scheme – and to cover personal expenses including health care, groceries, dining, and vehicle maintenance.
The complaint details that Groover solicited more than $1.4 million from customers for forex trading but only used approximately $650,000 to actually trade, losing the majority of those funds. He then allegedly commingled customer funds with his personal accounts. Further, the CFTC alleges Groover provided at least one customer with false account statements indicating trading profits when, in reality, their funds were largely depleted.
Judge Richard Schell has scheduled a hearing on the CFTC’s motion for a preliminary injunction for February 22, 2011. The CFTC is seeking restitution, disgorgement of ill-gotten gains, civil monetary penalties, and permanent bans from trading and registration. Joanne Groover, Larry Groover’s wife and a co-resident of Gunter, Texas, has been named as a relief defendant, as she allegedly received funds derived from the fraudulent scheme and holds joint accounts where customer money was deposited.
The CFTC acknowledged the assistance of the Texas State Securities Board, the Collin County District Attorney’s Office, and the U.S. Marshals in the investigation.
Source: CFTC.gov
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