Masterminds in $30M FX fraud receive five years imprisonment

According to the US Department of Justice, two American individuals involved in a $30 million fraudulent foreign exchange trading scheme have received a prison sentence of up to five years. The two individuals had already pled guilty to the charges of participating in the scheme.

Masterminds behind $30M FX fraud arrested for five years

The two individuals arrested are 45-year-old Patrick Gallagher from Massachusetts and 50-year-old Michael Dion from Florida. The two have received a prison sentence of four years and seven months.

Before the sentencing, the two individuals had already pled guilty to the charges of conspiracy to commit securities fraud in September last year. Those found guilty of committing this financial crime face a maximum prison sentence of five years.

The court documents related to this case show that Dion and Gallagher operated a forex trading scheme through their company, Global Forex Management. The two individuals promised investors large returns using previous return records that were fabricated.

Besides the two individuals giving their investors fake results of financial returns, they also informed investors that the funds invested on the platform would go towards trading activities on an online trading platform. The second trading platform that reportedly supported trades is a co-conspirator company known as IB Capital.

However, this financial service company did not offer the services it promised investors. Instead, Gallagher and Dion stole investor funds by working with their co-conspirators from the Netherlands. The two individuals stole $30 million from investors after failing to make any money from their trades in May 2021.

The two individuals lied to investors that they did not receive any returns on their investments because of the massive losses from trades. However, the two instead transferred the money using shell companies in different countries.

Increase in fraudulent schemes globally

There has been a significant increase in fraudulent schemes reported globally. Authorities in the US have been cracking down on crypto fraud and other scams involving financial products.

US authorities arrested the mastermind behind the EminiFX platform. The individual pled guilty to fraud charges after defrauding thousands of investors over $248 million. In December last year, the US Securities and Exchange Commission (SEC) arrested eight influencers on Twitter after they used the social media platform to manipulate exchange-traded stocks.

There has been a notable increase in the number of fraudsters arrested in the US. The same is also seen in Australia, where two directors of a $180M forex Ponzi scheme were arrested for ten years each. The two were also heavily fined for operating this scheme for seven years.

The majority of these schemes are similar because they offer investors unrealistic gains. The French financial market regulator also recently issued an alert about fraudulent trading robots targeting French residents. These robots promise annual returns of up to 400%.