The Canadian FOREX Scam in Panama
Tuesday, April 07 2009 @ 08:30 PM UTC
Contributed by: Don Winner
By DON WINNER for Panama-Guide.com - An article appeared last week in the English language version of the La Estrella newspaper here in Panama under the title "Canadian fraudster robs expats blind". The two primary people named in that article are Mary Sloane and her "husband" David Roland. Mary contacted me yesterday afternoon primarily because she was concerned I would simply pick up on the article as it appeared in La Estrella and run it again on Panama-Guide. Also, the article is so full of mistakes and errors that she wanted to have the opportunity to tell her side of the story. In speaking to her I realized it would take some doing to tell this story right, and to handle it in an objective and professional manner. At first blush it seems La Estrella made the mistake of only listening to one side of the story, and they failed to take the larger picture into account. (more)
About Razor FX: The more I look into this case, the less I get the feeling that I have to do a whole lot of independent digging or investigation. This afternoon I found this press release from the United States District Attorney's Office, Eastern District of New York:
- FOR IMMEDIATE RELEASE
- January 15, 2008
- PRESS RELEASE
- SPOT FOREIGN CURRENCY TRADER ARRESTED FOR RUNNING FRAUDULENT SCHEME
- Fraud Scheme Takes In Approximately $68 Million In 2007
- Benton J. Campbell, United States Attorney for the Eastern District of New York, and Philip Bartlett, Acting Postal Inspector-in-Charge, New York Division, announced the arrest today of MICHAEL RICHARD MACCAULL on mail fraud and wire fraud conspiracy charges. The government has also filed seizure warrants for two automobiles which the defendant purchased for more than $245,000. The defendant’s initial appearance is scheduled this afternoon before United States Magistrate Judge Ramon E. Reyes, Jr. at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
- According to the complaint, MACCAULL is one of the principals of Razor FX, Inc., which held itself out as a financial services firm in the business of trading in the spot foreign exchange market, and at various times had offices located in Great Neck, New York and Upper Saddle River, New Jersey, and maintained a website at www.razorfx.com. The complaint charges that beginning in 2000, the defendant defrauded hundreds of investors by fraudulently representing that he was investing their money in the spot foreign exchange market, when in fact he and his partner were simply depositing the money in a bank account from which they paid their living expenses, including MACCAULL’s residence and an Aston Martin automobile. In order to conceal their scheme from investors, MACCAULL and his partner sent out false account statements to the investors reporting non-existent trades and profits. Whenever investors sought to withdraw funds, they were simply paid from the funds received from other investors. As alleged in the complaint, MACCAULL and his partner received approximately $68 million from investors in 2007 alone.
- If convicted, the defendant faces a maximum sentence of 20 years’ imprisonment.
- The government’s case is being prosecuted by Assistant United States Attorneys Richard T. Faughnan, Cynthia M. Monaco, Kathleen Nandan, and Brendan King.
- The Defendant: MICHAEL RICHARD MACCAULL
- Age: 36
That's Pretty Cut and Dried: In Panama the money from the "investors" (suckers) was funneled to the crooks in New York through a company called London Asset Management (LAM). LAM has been named as a victim in the case, and they stand to receive a substantial amount of money from whatever is left in the bank accounts once the case is settled. In investigating these cases, rule number one is "follow the money." My question - did Mary Sloane end up with a whole bunch of money that was stolen from investors? The answer to that one is no, she did not. In fact, she and her family members invested more than $50,000 of their own money into this scam, which was also lost.
Finder's Fees: Mary Sloane did collect about $100,000 dollars in payments for bringing in new customers, and she pumped much of that money right back into this scheme as well. Suffice it to say that she didn't end up with the money, but rather lost quite a bit herself.
Another Version, Mirroring What Happened in Panama: In searching the web looking for people who were talking about this whole thing, I ran into this, which looks like it's practically a mirror-image of what happened to the people in Panama;
- Posted to the ForexFactory.com by user araouf - "Unfortunately I am one of the victims of this scam. I was not dealing directly with razor fx but rather with an introducing type company called Horizon FX (HFX) that is based here in Vancouver B.C. At this point I have no reason to believe that HFX had anything to do with the fraud and it seems that they were victims as well. This was a managed fund where they did all the trades (Razor FX did). Every week we received statements of the trades they had done in the week and it averaged about 1% per week. All seemed very well with consistent and conservative gains. Most weeks were up and a few were in the negative."
Same Shit, Different Victims: In that guy's case the "introduction company" was Horizon FX, in Panama it was London Asset Management. Notice what the guy says - "At this point I have no reason to believe that HFX had anything to do with the fraud and it seems that they were victims as well." That seems to be the case with London Asset Management here in Panama as well.
The Criminal Complaint in Panama: One of the victims here in Panama is named Mike Brausam. I spoke to him yesterday, and he confirmed that he has filed a criminal complaint against London Asset Management alleging fraud. He reiterated on several occasions that he was not the original source for the article that appeared in La Estrella, but that the reporter did contact him and interviewed him on the phone about the case. He said that, based on advice from his lawyer, he should not discuss any of the particular details of this complaint, so as not to jeopardize the potential future outcome. He did say that "I wish I could sit down with you for three hours and go over all of the evidence" in the case. Without talking about the specific details of what might or might not be in the file, I got to the crux of the matter - does he feel that London Asset Management knew what was going on, that they went out of their way to defraud the victims and to steal his money - and the answer was "yes."
Notified in January 2008: Mary Sloane and the primary actors behind London Asset Management learned that Razor FX was a scam when they were notified by the prosecutors that they had been listed as a victim in the case against MICHAEL RICHARD MACCAULL and Razor FX. In other words, it appears that they had no clue as to what was going on. Those guys in New York were simply taking in people's money, spending it, and paying out from the new money they were receiving. In short, a classic Ponzi or pyramid scheme.
Several Other Victims Came to Mary Sloane's Defense: I made some more phone calls and spoke to several other people who lost money in this scam. Some of them lost a whole lot of money - hundreds of thousands of dollars. Victims of these things don't like to have their names in the press for several reasons. First of all they are usually very smart people and having been caught by this scam they feel stupid. Secondly, they have other things going on in their lives and don't want to be associated with a negative news story in any way. Suffice it to say that everyone I spoke to (besides Mike) all said they were relatively certain Mary Sloane and London Asset Management did not, in fact, steal their money or try to defraud them. They all think LAM was just caught by this scam, the same as they were.
Like I Said, Not Wasting A Lot Of Time or Effort: So far I have not seen any thing (at all) convincing that would indicate any intend to defraud or "scam" members of the English speaking expatriate community here in Panama or elsewhere on the part of London Asset Management or Mary Sloane. Of course, the criminal complaint filed by Mike Brausam will run its course. So far it started with a backwoods prosecutor in Cocle who was obviously over his head. He basically went "stall, stall, stall, punt..." and the case is now reportedly going to be sent to a prosecutor in Panama City. According to Panamanian law, a prosecutor is supposed to only have four months to investigate a case, and after that time he has to either file charges and bring the case before a judge or throw it out for lack of evidence. The charges were originally filed back in March of 2008, so he screwed around with it for more than a year, and just recently decided that he's over his head.
Contacted the US Attorney's Office: I've got phone calls into the prosecutors who are handling the case in New York, and I would like to get their read on what happened. I suspect there are string of victims just like London Asset Management in the case file, and that many of those people are in situations very similar to that of Mary Sloane - maybe a little red-faced but apparently not very guilty of anything criminal. My primary question - is there any other prosecutorial activity going on against any of the other "introduction" companies, or is London Asset Management the only one? In fact, do they even know about the criminal suit filed in Panama by Mike Brausam against London Asset Management?
Are You A Victim of Razor FX? If so, please post a comment to this article or send your comments to me at firstname.lastname@example.org. As usual, your identity and confidentiality will be protected should you so desire. I would like to talk to more people about this situation, particularly with regards for the potential for guilt or culpability of the "introductory" companies who basically pulled new money in for Razor FX. My question - did they know it was a scam, or not?
Man, I'm In The Wrong Business: I read about these guys who just throw up a website or whatever and people simply shovel money their way, and it simply amazes me. Hey guys, just send me $5,000 bucks and I'll turn it into diapers and dog food right before your very eyes. Want my account number for the wire transfer? Friggin' amazing...
Copyright 2009 by Don Winner for Panama-Guide.com. Go ahead and use whatever you like as long as you credit the source. Salud.