U.S. COMMODITY FUTURES TRADING COMMISSION CHARGES FOREIGN FUND FOR DEFRAUDING THOUSANDS OF CUSTOMERS IN INTERNATIONAL PONZI SCHEME
Foreign Fund, Ron Mealing and John Shirck Allegedly Operated Commodity Futures Fraud Involving Foreign Currency Trading
WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced that on October 5, 2004, a federal district court judge in Nashville, Tennessee, acting on a CFTC complaint filed earlier that day, issued an order freezing the assets and preventing the destruction of the books and records of defendants Foreign Fund a/k/a First Bank (Foreign Fund) purportedly of King of Prussia, Pennsylvania, Ron Mealing of Nashville, Tennessee, and John Shirck of Mountain View, California.
The CFTC complaint charges Foreign Fund, Mealing, and Shirck with fraud for allegedly misappropriating customer funds in a Ponzi-like scheme where retail customers were solicited via the Internet to trade foreign currency futures. The CFTC also charged the defendants with trading illegal, off-exchange foreign currency futures contracts (forex).
Specifically, the complaint alleges that since at least November 2003, Foreign Fund has defrauded thousands of retail customers by misappropriating more than $3 million that was solicited through the Foreign Fund website, and by emails sent by its agents and representatives, for the purpose of speculating on the value of foreign currencies.
According to the complaint, Foreign Fund did not trade customer funds as promised. The complaint alleges that instead, Foreign Fund—through the actions of Mealing and Shirck—misappropriated most of the funds, which were initially deposited in accounts held in the name of relief defendants MW First Inc. and MW First Trustees Inc., by transferring monies overseas to an account held in Latvia to the benefit of relief defendant Star Connection Inc., or by returning funds to earlier customers in furtherance of the Ponzi-like scheme. Relief defendants Wally Dow, Wolfgang J. Fastian, and Deana Whitley are also alleged to be custodians of certain Foreign Fund customer funds. The court-ordered asset freeze also applies to the relief defendants. Relief defendants are not charged with wrongdoing, but solely with holding funds from the illegal scheme.
The CFTC is seeking a permanent injunction against each defendant, repayment to defrauded customers, return of all ill-gotten gains from the defendants and relief defendants, and civil penalties for each violation of the Commodity Exchange Act and CFTC regulations.
The following CFTC Division of Enforcement staff members are responsible for this case: Todd Kelly, Lael E. Campbell, Patricia Gomersall, Susan Berkowitz, Grant Collins, Paul Hayeck, and Joan Manley.
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