SALT LAKE CITY, UT – Paul R. Grant, formerly of Alpine, Utah, has been ordered to pay $240,000 in civil monetary penalties and is permanently barred from commodity trading, the U.S. Commodity Futures Trading Commission (CFTC) announced November 20, 2008. The judgment stems from a long-running case revealing a massive Ponzi scheme operated through his company, 4NExchange.
U.S. District Court Judge Dale A. Kimball issued the order on November 18, 2008, adding to a previous order from April 25, 2008. 4NExchange and co-defendant Ronald K. Bassett of Lindon, Utah, were jointly held liable for an additional $480,000 penalty. The court found that from at least April 1999 through May 2002, Grant and Bassett used 4NExchange to defraud over 220 customers out of more than $30 million.
The scheme falsely presented itself as a legitimate foreign exchange (forex) futures business. However, the court determined that little actual trading occurred. Instead, 4NExchange operated as a Ponzi scheme, utilizing funds from new investors to pay purported “profits” to earlier investors. Grant and Bassett allegedly made false claims regarding past performance and profit potential, while misappropriating customer funds for personal gain and to maintain the illusion of profitability.
The CFTC’s investigation revealed that 187 customers suffered a total loss of $18,645,121.89. This civil action, CFTC v. 4NExchange, et al., resolves charges brought by the CFTC. Notably, both Bassett and Grant are currently serving 60-month federal prison sentences stemming from a related criminal indictment in 2003. They were convicted of conspiracy to commit fraud, money laundering, wire fraud, and transporting stolen money. They were also ordered to pay $18,645,121.89 in restitution to the victims.
The CFTC acknowledged the valuable assistance provided by the Utah Division of Securities throughout the investigation and prosecution of this case.
Source: CFTC.gov
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