Palm Beach County Man Pleads Guilty to Wire Fraud and Criminal Contempt Charges
A Palm Beach County man pled guilty today to wire fraud and criminal contempt charges.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Troy Walker, Special Agent in Charge, Florida Department of Law Enforcement (FDLE), made the announcement.
David Lee Ortiz, 39, pled guilty today to charges of telemarketing wire fraud, in violation of Title 18, United States Code, Section 1343; and contempt of court, in violation of Title 18, United States Code, Section 401(3).
Sentencing for Ortiz is scheduled for December 2, 2015, before United States District Judge Robin L. Rosenberg in Fort Pierce. At sentencing, Ortiz faces a maximum statutory sentence of twenty years in prison on the wire fraud count, and, a maximum sentence of life in prison on the contempt of court count.
According to statements made in court and documents filed in the case, Ortiz committed online and telemarketing fraud in the form of fraudulent foreign exchange (forex) investment scams, via Internet and e-mail, among other means. Ortiz collected from his victims approximately $420,000 through fraudulent websites and advertisements offering 10% per month returns on forex contracts and currency trades. Ortiz represented that investor funds would be kept in individual investor accounts for his clients, but they were in fact aggregated and commingled. He invested some of the money with losing forex positions at two licensed Futures Commission Merchants. The remainder of the money he diverted to his own personal uses. To attract investors, Ortiz established Internet websites. In July 2008, he set up “forexisgreatfor.me,” on which he falsely claimed to have over thirty years in forex trading experience, as well as that he was registered with the Securities and Exchange Commission. In October 2009, he also established the website “forexfuturestrader.com,” again falsely claiming to provide daily updates accessible online for individualized investor accounts, as well as promising 100% returns within 12 months.
Ortiz misappropriated at least $232,000 by, for example, using the funds for personal shopping at retail department stores, travel, resort hotels, restaurants, utility bills, personal credit cards and car payments, and by sending, or having some customers send their funds directly, to Ortiz’s wife and her business, who also did not use those funds for forex trading. Over the period of 2008-2011, Ortiz solicited and took investment from clients, variously placing the monies in accounts he personally controlled, investing some of it in losing forex trades, and mostly spending the remainder on himself. Ortiz concocted false account statements purporting to show the clients that they were making profits on imaginary forex contracts placed for them by Ortiz. When customers tried to recover all or part of their monies, usually in accordance with withdrawal provisions of a written contract which Ortiz had them sign, they regularly met evasion or delay from Ortiz.
The Commodity Futures Trading Commission (CFTC) investigated Ortiz, and filed a civil enforcement action against him in the Southern District of Florida in February 2011. The CFTC sought Court orders directing rescission of the investment contracts and return to the investors of all their monies. Chief United States District Judge K. Michael Moore signed a permanent injunction against Ortiz on June 30, 2011, directing Ortiz to return the investors’ money and rescind all the investment contracts. The injunction also forbade Ortiz from soliciting or accepting funds from any future investors.
During July and August 2011, Ortiz nonetheless continued to solicit and accept funds from investors. In particular, he met with and took $2,800 from a retired Air Force employee living in Odessa, Texas. Twice in September 2011, Ortiz e-mailed to that investor false account statements purporting to show gains and profits from forex trades. The CFTC filed a motion for civil contempt against Ortiz for his failure to abide by the permanent injunction entered by Chief Judge Moore in the civil case. On June 4, 2012, Chief Judge Moore held an evidentiary hearing on the civil contempt motion, at which Ortiz appeared pro se. Following the hearing, the CFTC filed a joint proposed agreed order (which the Court approved and entered on June 6, 2012) setting forth a timetable for Ortiz to submit a sworn accounting and repayment of monies, no later than August 6, 2012. On August 6, 2012, Ortiz filed a document with the Court, stating that he had received the $2800 from the Texas investor, but that Ortiz was unable to comply and pay any monies to the aggrieved investors.
A federal grand jury sitting in Fort Pierce, Florida, indicted Ortiz on February 19, 2015, charging him with three counts of wire fraud and one count of criminal contempt of court for his actions.
Mr. Ferrer commended the investigative efforts of the CFTC, FDLE, FBI, and the Palm Beach County Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Theodore Cooperstein.