Ponzi Defendants Found Guilty
Cunningham and Smith Participated in 30/30 Investment Club
|U.S. Attorney’s Office August 04, 2011|
ABINGDON, VA—The final two members of an “investment” club that turned out to be nothing more than a Ponzi scheme that bilked investors out of more than $1.4 million were found guilty this morning in the United States District Court for the Western District of Virginia following a jury trial.
Terrance Keith Cunningham, 39, of Alpharetta, Ga., and Angela Allison Duty Smith, 35, of Davenport, Va., were found guilty this morning following a lengthy jury trial. A third defendant, Ronald Wade Smith Jr., 36, of Davenport, Va., previously pleaded guilty. This morning, Angela Smith was found guilty of 210 counts of wire fraud, 23 counts of money laundering, one count of commodities fraud, and one count of conspiracy to commit wire fraud. Cunningham was found guilty of 210 counts of wire fraud, 17 counts of money laundering, one count of obstruction, one count of commodities fraud, and one count of conspiracy to commit wire fraud.
“Protecting our citizens from financial fraud is a top priority of the Department of Justice,” United States Attorney Timothy J. Heaphy said today. “This case demonstrates our commitment to prosecute those who prey upon investors with false promises of unreasonably high rates of return. While we will continue to identify and apprehend individuals who make these bogus claims, investors need to be vigilant and carefully scrutinize the promises made by individuals seeking to invest their money. The old adage applies: if it sounds too good to be true, it probably is.”
According to evidence presented at trial by Assistant United States Attorneys Jennifer Bockhorst and Zach Lee, in the winter of 2008-2009, Ronald Smith created a website, safeguard.com, to market an “investment club” called “Safeguard 30/30 Investment Club” which offered investors 30 percent returns on a 30-day business cycle. During this time, Ronald Smith posted a video to the website in which he explained a method of investing in foreign currency exchange markets which he claimed made 95.5 percent positive returns.
In 2009, Cunningham enlisted individuals to become members and invest in the Safeguard 30/30 Investment Club, telling perspective investors he was a partner in the club and directing them to Ronald Smith and the website. Ronald and Angela Smith also enlisted members to invest in Safeguard 30/30 Club in 2009, telling perspective investors that Ronald Smith would invest their money in foreign currency exchange markets.
Throughout 2009-2010, Angela and Ronald Smith received wire transfers and case deposits made into a BB&T bank account from investors in the Safeguard 30/30 Club. During this same time period, Angela Smith and Ronald Smith paid personal expenses from the BB&T account, including costs related to the building of a new house and pool and nearly $30,000 in furniture purchases.
Between August 2009 and March 2010, Ronald Smith, Angela Smith and Terrance Cunningham communicated a series of false and fraudulent stories to investors in Safeguard 30/30 Investment Club purporting to explain why payments on investment returns were not made.
As a result of the conspiracy, approximately $1.5 million was deposited into the BB&T bank account, causing victims to suffer over $1,000,000 in losses.
The investigation of the case was conducted by the Internal Revenue Service and the Federal Bureau of Investigation, with the cooperation with the Commodities and Futures Trading Commission. Assistant United States Attorneys Jennifer Bockhorst and Zach Lee prosecuted the case for the United States.