Graham man charged in $4.7 million Ponzi scheme
CHARLOTTE, N.C.– The owner of a North Carolina investment firm has been charged with securities fraud for orchestrating a Ponzi scheme that solicited victims to invest millions in the foreign currency market (FOREX).
James H. Mason, 66, of Graham was charged on April 18 with one count of securities fraud in connection with a $4.7 million foreign currency Ponzi scheme.
Beginning in 2010 and continuing through March 28, 2013, Mason executed the Ponzi scheme by soliciting his victims to invest with his companies, JHM Forex Only Pool and Forex Trading at Home Association, for the purpose of investing in over-the-counter foreign currency exchange.
According to the indictment, Mason engaged in a scheme to defraud victims by making series of false representations, omissions of material facts and deceptive half-truths.
Mason falsely claimed that he had over 35 years of experience in commodity futures and option trading, when he had no experience at all. He also lured his victims to invest by falsely projecting substantial returns on their investments.
He solicited at least 500 victims to invest over $4.7 million, according to allegations. Rather than investing his victim’s money as promised, Mason deposited the money into bank accounts he controlled, then used a substantial amount of itheir money to pay for personal and business expenses, real estate and cars.
The indictment also alleges that Mason diverted most of the rest of his victim’s money to make “Ponzi” payments to other victims.
Throughout the course of the scheme, Mason put only a portion of investor money into foreign currency exchange, according to the indictment. He lost all of the money he invested while conducting FOREX trading.
He also failed to disclose his trading results to his victims, instead making false oral representations and providing false statements to clients and reporting false profits.
The indictment alleges Mason established a website so investors could accesses their online accounts and encourage individuals to further invest in his fraudulent foreign currency commodity. The online accounts indicated that investors were making money through successful trading and that they had significant amounts of money in their accounts, however, profits stated on individual investor accounts were false, and in many cases, there was no money in the accounts.
Mason faces up to 20 years in prison and a $5 million fine, along with restitution to his victims.
The case was investigated by the North Carolina Secretary of State, Securities Division with the assistance from the FBI.