Las Vegas Man Surrenders in Los Angeles Following Indictment for Operating a Ponzi Scheme and Lying to Federal Authorities
|U.S. Attorney’s Office October 24, 2012|
LOS ANGELES—The architect of a fraudulent investment scheme is scheduled to be arraigned this afternoon after surrendering to authorities here on charges related to an alleged Ponzi scheme that bilked victims out of millions of dollars.
Gordon Driver, 54, of Henderson, Nevada, was arrested in this case in Nevada on October 9. He appeared in federal court in Las Vegas that afternoon and was released on bond. Driver was directed to appear today in United States District Court in Los Angeles, where a federal grand jury indicted him October 4 on charges of mail fraud, wire fraud, commodity pool operator fraud, and making false statements to the Securities and Exchange Commission.
According to the indictment, Driver falsely told victims that he was producing earnings of 1 percent to 5 percent a week through a commodity futures trading program involving e-Mini S&P 500 futures contracts. In reality, his trading activity was overwhelmingly unprofitable, causing him to lose nearly almost all the money that he used to trade commodities.
Investigators believe that Driver took in at least $15 million and that investors—including several Southland residents and people in Canada—collectively lost at least $9 million as a result of the scheme.
Driver solicited investments through Nevada-based companies with names like Axcess Automation LLC and a hedge fund he called Axcess Fund LP. In addition to claiming he was earning huge returns, Driver allegedly told victims that he had never sustained a net trading loss over the course of any month, and he allegedly failed to tell clients that he used some of their money to pay personal expenses and to make Ponzi payments to some investors.
In addition to the fraud allegations, the indictment charges Driver with making false statements in a matter pending before the SEC in April 2009. Reiterating some of the false statements made to investors, Driver allegedly made false under-oath statements to an SEC attorney in a deposition in April 2009.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The indictment specifically charges Driver with two counts of mail fraud, nine counts of wire fraud, two counts of commodity pool operator fraud, and three counts of making false statements. If he is convicted of the 16 charges in the indictment, Driver would face a statutory maximum sentence of 275 years in federal prison.
The Commodities Futures Trading Commission filed suit against Driver and two of his companies in 2009. In July of this year, a federal judge in Los Angeles ordered the defendants to pay more than $41 million in restitution and penalties (see: http://www.cftc.gov/PressRoom/PressReleases/pr6304-12).
The Securities and Exchange Commission also filed a civil action in 2009 in Los Angeles federal court against Driver and his companies, and Driver subsequently consented to entry of a permanent injunction barring him from violating certain federal securities laws (SEC v. Driver, et al., CV 09-3410-ODW). The case is still pending a determination by the court of the amount of disgorgement and penalties to be imposed.
The Ontario (Canada) Securities Commission recently issued a decision finding that Driver and others committed fraud and violated Canadian securities laws (see: http://www.osc.gov.on.ca/en/NewsEvents_nr_20120928_osc-rad-axcess.htm).
The criminal case against Driver is the result of a joint investigation by the Federal Bureau of Investigation and the United States Postal Inspection Service, both of which received assistance from the Commodities Futures Trading Commission, the SEC, the Attorney General of Ontario (Canada), and the Ontario Securities Commission.