A Staten Island man, EDWARD J. SERVIDER, a/k/a “Nick Halden,” has been charged with commodities fraud, mail fraud, and wire fraud in connection with a scheme to defraud over 100 investors out of more than $2.4 million.
According to the allegations, SERVIDER, through his firm EJS Capital Management, LLC, fraudulently solicited investments for trading in off-exchange foreign currency (“Forex”) transactions from March 2013 through July 2014. However, none of the money was used for such transactions, and SERVIDER converted the funds to his own use, and the use of others, without the authorization of his investors.
U.S. Attorney Preet Bharara said: “As alleged, Edward Servider not only lied to his investors about his past performance in the Forex markets, but actually did not even engage in any trades for his investors. Instead, Servider allegedly used investor money to fund his own extravagant lifestyle, including to pay for an engagement ring, a BMW lease, hotel rooms and parking tickets.”
FBI Assistant Director in Charge William F. Sweeney said: “When people decide to invest their money, those investors understand it may take time before they see a return on their investments. The subject in this case allegedly believed his clients weren’t ever going to ask where their money went, and chose to spend it. Traders hoping to live the high life should view this case as a cautionary tale. There is no pot of gold at the end of the rainbow, only investors and the FBI and our law enforcement partners demanding you explain where the money went.”
According to the allegations in the Complaint unsealed in Manhattan federal court, SERVIDER set up a retail foreign currency exchange trading firm, called EJS Capital Management, LLC (“EJS”) in Brooklyn. SERVIDER and his business partner (“CC-1”) ran EJS from March 2013 through July 2014. EJS employed salespeople who made unsolicited telephone calls to prospective investors. SERVIDER and the EJS salespeople told prospective investors that their funds would be used to trade in Forex transactions, and provided them with a “performance report” that falsely claimed that between 2010 and 2013, EJS had achieved gross annual returns for its investors of approximately 18 percent, 22 percent, 49 percent, and 77 percent (the “EJS Performance Report”).
In fact, instead of being used to execute Forex trading, the majority of the investor funds was misappropriated and used to pay SERVIDER and CC-1’s personal expenses and purported business expenses for EJS. For example, SERVIDER used investor funds to purchase an engagement ring, to lease a BMW vehicle for his girlfriend, and to pay for hotel rooms, rental cars, and parking tickets. SERVIDER will be presented before Magistrate Judge Barbara Moses.
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Key Facts
- State: New York
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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