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RELEASE: pr5721-09

  • Release: 5721-09
    For Release: September 23, 2009

    Federal Court Issues Preliminary Injunction Against Florida Resident Beau Diamond and His Company, Diamond Ventures LLC, in CFTC Multi-Million Dollar Forex Fraud Action

    Court continues earlier asset freeze; Diamond remains in Federal custody in connection with a related criminal action.

    Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that it obtained a preliminary injunction against defendants Beau Diamond (Diamond) and his company, Diamond Ventures LLC (DVL), both of Sarasota, Fla. The order, entered on September 22, 2009, by U.S. District Court Judge Elizabeth A. Kovachevich in Tampa, continues the court’s September 3, 2009, asset freeze against Diamond and DV and prohibits them from further violating the Commodity Exchange Act, as charged (see CFTC Press Release 5711-09, September 4, 2009, and CFTC v. Beau Diamond, et al., No. 09 CV 1811 (M.D. Fl. 2009)).

    The court found the preliminary injunction necessary to protect the public from further loss and damage and to enable the CFTC to fulfill its statutory duties.

    The court’s order stems from a CFTC complaint filed on September 3, 2009, charging Diamond and DV with misappropriation and fraud in operating a foreign currency (forex) Ponzi scheme. The defendants allegedly solicited approximately $37 million from at least 200 investors.

    The CFTC alleges that, from at least June 18, 2008 to the present, the defendants misappropriated at least $850,000 of customer funds and used the money for gambling and luxury purchases, including jewelry, air fares and hotel accommodations.

    According to the CFTC complaint, the defendants falsely guaranteed the return of investors’ principal and monthly returns ranging from 2.75 percent to 5 percent, purportedly paid from the defendants’ successful forex trading. In reality, the defendants lost $13.3 million trading forex. To conceal and perpetuate their alleged fraud, the defendants provided customers with false account statements misrepresenting that their accounts were increasing as promised, although the accounts were actually incurring substantial losses.

    Diamond Arrested on September 2, 2009

    On September 2, 2009, Diamond was arrested in Florida by Federal authorities in connection with a related criminal complaint. On September 10, 2009, a Federal magistrate judge issued an order denying Diamond’s request for bond and ordered him detained.

    In the continuing litigation, the CFTC is seeking permanent injunctive relief, return of funds to defrauded investors, repayment of ill-gotten gains, civil penalties and other equitable relief.

    The following CFTC Division of Enforcement staff members are responsible for this case: Diane M. Romaniuk, Ava M. Gould, Mary Elizabeth Spear, Scott R. Williamson, Rosemary Hollinger and Richard B. Wagner.

    Media Contacts
    Scott Schneider
    202-418-5174

    Dennis Holden
    202-418-5088

    Last Updated: September 23, 2009