ROANOKE, VA – Ted James Johnson, of Pearisburg, Virginia, was found guilty on October 17, 2008, on 37 criminal counts related to the operation of a multi-million dollar Ponzi scheme, according to a statement released by the U.S. Commodity Futures Trading Commission (CFTC).
The verdict followed a nearly three-week jury trial in the U.S. District Court for the Western District of Virginia. Johnson was charged with commodity pool fraud, embezzlement of commodity pool funds, and acting as an unregistered commodity pool operator, among other crimes including mail fraud, wire fraud, money laundering, and securities fraud.
Prosecutors proved that Johnson and his partner, Frank Graham Farrier, misled investors into believing their funds were being used to trade commodity futures contracts. In reality, much of the money was used to pay earlier investors – a classic hallmark of a Ponzi scheme. Johnson and Farrier were originally indicted in July 2007 on 42 criminal counts.
Farrier previously pled guilty to two counts of mail fraud, one count of money laundering conspiracy, one count of securities fraud, and one count of being an unregistered commodity pool operator. He has agreed to forfeit his assets.
Both Johnson and Farrier now face a maximum penalty of 85 years imprisonment and a fine exceeding $4.5 million. Sentencing dates have not yet been announced. The CFTC worked closely with the U.S. Department of Justice Fraud Section, the Federal Bureau of Investigation, the United States Postal Inspection Service, the Internal Revenue Service, and the Virginia State Corporation Commission during the investigation and prosecution.
The case was prosecuted by the U.S. Attorney’s Office for the Western District of Virginia. The CFTC provided expert testimony during the trial.
Source: CFTC.gov
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