Caribbean360: OLINT boss pleads guilty to fraud in US

OLINT boss pleads guilty to fraud in US
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Chris Hoyos on 30/03/2011 09:26:00
 
FLORIDA, United States, Wednesday March 30, 2011 – Jamaican Ponzi schemer
David Smith is now facing up to 20 years in prison after admitting to 23 fraud
charges in a plea deal with US prosecutors that will also require him to forfeit
his assets and reimburse investors.
Smith, 41, who ran Overseas Locket International Corporation Ltd (OLINT) – a
multi-billion dollar foreign exchange trading scheme – pleaded guilty to four
counts of wire fraud, one count of conspiracy to commit money laundering, and 18
counts of money laundering in an Orlando, Florida federal court yesterday.
The wire fraud counts carry a maximum penalty of 20 years in federal prison, a
fine of US$250,000, and a term of supervised release of not more than three
years. In addition, for each count of wire fraud the fine may be assessed at
twice the amount of gross gain or loss.
Under the terms of the plea agreement, Smith agreed to make full restitution to
every investor in OLINT “and any other person who was directly and proximately
harmed as a result of the commission of the offenses of conviction”.
Additionally, he has agreed to forfeit all assets and property including, but
not limited to, US$128 million which prosecutors said was the proceeds of the
wire fraud; property in Florida purchased with a US$159,881.10 down payment
traceable to the wire fraud proceeds; US$40,103.90 which he transferred to his
sister Bette Gordon and her husband Paul Gordon; and precious gemstones,
precious metals and jewellery.
Last September, Smith pleaded guilty to fraud and conspiracy charges in the
Turks and Caicos Islands and he was sentenced to serve six-and-a-half years in
prison. However, he was taken to the US two months later to face charges there
and his case had been set for trial next month.
According to the prosecutors, for more than three years, Smith executed a Ponzi
scheme to defraud over 6,000 investors located in the Caribbean and the US out
of more than US$220 million. He’d led investors to believe that he was
investing their money in foreign currency trading, earning 10 percent per month
on average, when he was really wasn’t.
In addition to defrauding those investors, Smith conspired to launder the
proceeds that were received in his scam, and he participated in the laundering
of millions of dollars of proceeds that were obtained as a result of wire fraud.
The four counts of wire fraud are based on Smith’s transmitting false and
fraudulent account statements to several investors through email and the OLINT
Internet website.
Smith also conspired with others to launder approximately US$128 million of
proceeds that were obtained as a result of the wire fraud scheme, and laundered
those millions of dollars to conceal and disguise the nature, the location, the
source, the ownership, and the control of the proceeds of the wire fraud.
During the entire time that Smith operated his Ponzi scheme, the only source of
income for him and his wife was from investors’ funds. Smith’s operation of
the Ponzi scheme effectively ended on July 15, 2008, when the Royal Turks and
Caicos Police Force, Financial Crimes Unit, executed search warrants at
Smith’s place of business and residence.
The U.S. Attorney’s Office has acknowledged the support of several regional
law enforcement agencies and governments in bringing Smith to justice, including
the Financial Crimes Unit with the Royal Turks and Caicos Police Force, the
Financial Services Commission in Jamaica, the Special Investigation and
Prosecution Team in Turks and Caicos, and the governments of the United Kingdom,
Turks and Caicos, and Jamaica.
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