CFTC charges Ronald Smith aka Safeguard 3030 Investment Club in Forex Fraud Scheme

Smith allegedly misappropriated approximately $800,000; court orders defendants’ assets frozen. Safeguard’s 3030 website which promises up to 30% in 30 days (!) is down.

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today charged Ronald W. Smith, Jr., of Vansant, Va., doing business as Safeguard 3030 Investment Club, with operating a Ponzi scheme involving the fraudulent solicitation of at least $800,000 from at least 34 customers in connection with off-exchange foreign currency (forex) trading. The CFTC complaint also charges the defendant with misappropriating approximately $800,000 of customer funds for personal use and to pay out purported profits and with issuing false customer statements to conceal the fraudulent misuse of funds.

Two relief defendants, including Smith’s wife, named in the federal lawsuit

The Honorable James P. Jones of the U.S. District Court for the Western District of Virginia, on February 23, 2010, the same day the complaint was filed, entered an order freezing assets held or controlled by Smith and relief defendants Angela A. Duty Smith and Tigre Systems, Inc. (Tigre) and prohibiting document destruction. The order also requires Smith and the relief defendants to account for assets. The CFTC complaint names Angela Smith and Tigre as relief defendants because they allegedly received customer funds to which they had no entitlement. Relief defendant Duty Smith, the treasurer of Tigre, is defendant Smith’s wife.

Defendant Smith allegedly used a video posting on www.youtube.com to lure and solicit customers

Specifically, the CFTC complaint charges that, since at least January, 2009, defendant Smith fraudulently operated a forex trading scam, luring customers to trade managed forex accounts or pooled forex investments by claiming forex trading success and offering promises of quick and large returns, such as 30 percent in 30 days. Smith allegedly claimed that 95 percent of his trades are winning trades. Smith also used a website and a video posting on www.youtube.com to solicit customers, according to the complaint.

In reality, however, Smith used little, if any, of the funds to trade forex. Instead, he used customer funds for personal expenses, such as for pool services, carpeting and furniture, according to the complaint. Customer funds also were allegedly used for purported profit payouts and for business expenses.

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