Reno Jury Convicts Montana Man of Investment Fraud Scheme Involving Foreign Exchange Market
|U.S. Attorney’s Office March 31, 2011|
RENO, NV—A Montana man who duped over 1,700 persons to give him millions of dollars to invest and trade in the high-risk foreign currency exchange market, but instead pocketed the money himself, has been convicted by a Reno jury of conspiracy, fraud, and money laundering charges, announced the United States Attorney’s Office for the District of Nevada.
Following a 13-day jury trial, Richard Young, 51, of Lewistown, Montana, was convicted on Wednesday afternoon, March 30, 2011, of one count of conspiracy to commit mail fraud and wire fraud, two counts of wire fraud, three counts of money laundering, and one count of securities fraud.
In a separate trial held today concerning the forfeiture of assets, the jury found that Young must forfeit a bank account containing approximately $500,000, a towing company, and four houses in Lewistown, Montana.
In early 2006, Young and co-defendant William Willard, 67, of Bozeman, Montana, formed an Internet-based company named Global One Group LLC (“Global One”). Global One initially was touted as a web-based forum to train individual investors to trade in the high-risk foreign currency exchange market, usually referred to as the Foreign Exchange Market, or FOREX. Young solicited membership fees from those who wished to join his training programs, which he conducted over the Internet and referred to as “webinars.” Young represented that he was a very successful FOREX trader who placed virtually no losing trades and could teach others to do the same.
The evidence showed that shortly after Global One’s inception, Young offered its members the chance to participate in a profit-sharing plan. Young promised that in return for contributions of money in thousand-dollar increments, Global One’s members would reap a share of the profits the company generated from FOREX trades placed by or on behalf of Global One members. The government argued at trial, that in reality the plan was a fraud and nothing more than a Ponzi scheme designed so Young could pay out proceeds masquerading as “profits,” when they were in fact the contributions paid by other duped participants.
The government’s indictment charged that Young and his co-conspirators fraudulently and deceitfully misrepresented the profits, profitability, and trading capability of Global One to induce its members to invest in Global One’s so-called profit-sharing program. Young concealed the scheme by inducing Global One members to place their money into FOREX broker accounts using the false pretense that their investments would be traded by an automated trader, “Global Trac,” which Young touted had historically produced winning trades over 95 percent of the time. Young pitched that his customers did not have to trade at all, but could simply turn control of their money over to Global One to trade for them through Global Trac. The government argued at trial that in truth, the automated trader never existed, and it was Young and others who were doing the trading.
The government’s evidence showed that the investors lost money in the high-risk FOREX market at an alarming rate. The government contended at trial that Young misled them about their losses, while he skimmed money from the profit-sharing program. The evidence at trial showed that Young raised about $16 million from approximately 1,750 persons he duped into “investing” in his programs—and pocketed millions for himself in the process.
Young was remanded to custody and is scheduled to be sentenced on June 30, 2011, at 10:00 a.m. in Reno. He faces up to 30 years in prison and a $1,000,000 fine on the conspiracy count and on each mail fraud and wire fraud count, up to 20 years in prison and a $500,000 fine on each money laundering count, and up to 10 years in prison and a $250,000 fine on the securities fraud count.
Co-defendant Willard pleaded guilty to conspiracy to commit wire fraud on February 25, 2011, and is scheduled to be sentenced in Reno on June 6, 2011.
The investigation is being conducted by the IRS Criminal Investigation and the FBI. The case is being prosecuted by First Assistant U.S. Attorney Steven W. Myhre and Assistant United States Attorney James E. Keller.