Raleigh, NC – August 28, 2015 – Ron Earl McCullough and David Christopher Mayhew have been ordered to pay over $3.7 million in restitution and penalties for operating a fraudulent foreign currency trading scheme, the Commodity Futures Trading Commission (CFTC) announced today. Senior Judge James C. Fox of the U.S. District Court for the Eastern District of North Carolina issued a default judgment against both men, who are from Raleigh, North Carolina.
The court found that from December 2008 to January 2012, McCullough and Mayhew fraudulently solicited approximately $2.3 million from at least 11 individuals to trade leveraged, off-exchange foreign currency contracts. They misrepresented their trading history and operated a Ponzi scheme, using funds from new investors to pay earlier investors. The pair misappropriated over $1.6 million, including $829,000 for personal use.
The judgment requires McCullough and Mayhew to jointly pay $1,223,388.43 in restitution and a $2,486,619.87 civil monetary penalty. They are also permanently banned from trading and registering with the CFTC, and prohibited from violating the Commodity Exchange Act (CEA) and CFTC regulations.
In a related matter, Travis Maurice Cox, a partner of McCullough and Mayhew, was also found to have engaged in fraudulent conduct. The CFTC issued an administrative order requiring Cox to pay $1,306,010.95 in restitution and a $330,000 penalty for misrepresenting trading results and misappropriating approximately $114,000 of customer funds.
David Christopher Mayhew was recently found guilty on June 12, 2015, by a jury of one count of conspiracy, ten counts of wire fraud, four counts of mail fraud, and three counts of unlawful monetary transactions. His sentencing is scheduled for September 28, 2015. McCullough remains at large as a fugitive from justice, having been indicted by a grand jury.
The CFTC advises potential victims that recovering lost funds through restitution orders is not guaranteed, as wrongdoers may lack sufficient assets. The agency pledges to continue pursuing those who commit fraud and violate the CEA.
The CFTC acknowledged the assistance of the U.S. Attorney’s Office for the Eastern District of North Carolina, the Federal Bureau of Investigation, the Internal Revenue Service, and the U.S. Postal Inspection Service in this case.
Source: CFTC.gov
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