For Release: March 5, 2009
CFTC Charges Ponzi Scheme in Mansfield, Texas, Caused More Than 250 Investors to Lose at Least $10.9 Million
Court Freezes Defendants’ Assets and Appoints Receiver
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today charged Ray M. White and CRW Management, LP (CRW), both of Mansfield, Texas, with operating a Ponzi scheme involving the solicitation of at least $10.9 million from more than 250 investors to trade off-exchange foreign currency contracts (forex).
The CFTC in its civil lawsuit, filed in the U.S. District Court for the Northern District of Texas, alleges that, rather than invest the funds, White and CRW stole millions of dollars, using investor money to fund a drag racing team, purchase real estate and multiple cars, and to purchase Dallas Stars hockey season tickets.
Specifically, the CFTC charges that, as early as November 2006, White and CRW told prospective investors that CRW would pool their funds and trade forex on their behalf, claiming that CRW would generate tremendous returns for investors of between five and eight percent weekly, or an annual return equivalent of between 260 and 416 percent.
As alleged, White and CRW lied to investors when they stated that CRW had achieved such returns, that investing with CRW involved very little risk, and that investor money was safe. The CFTC lawsuit further alleges that White and CRW failed to disclose to investors that of the at least $10.9 million invested, at most only $94,000 was ever used to trade forex and most of that was lost.
White and CRW, as further alleged, failed to inform investors that any purported profits paid to CRW investors came from either existing CRW investors’ original investments or money invested by subsequent CRW investors – in other words, White and CRW were running a Ponzi scheme.
Two Relief Defendants Also Named
In addition, Christopher R. White and Hurricane Motorsports, LLC, are named in the complaint as relief defendants because they received funds as a result of defendants’ fraudulent conduct and have no legitimate entitlement to those funds.
Court Sets Preliminary Injunction Hearing for March 11
At the request of the CFTC, on the same day the complaint was filed, U.S. District Court Judge Ed Kinkeade froze defendants’ assets and permitted the CFTC to seize all relevant records in their possession. Judge Kinkeade also appointed Tim Mack as a temporary receiver. A preliminary injunction hearing was set for March 11, 2009.
In the continuing litigation, the CFTC seeks restitution, disgorgement of ill-gotten gains, civil monetary penalties, and permanent injunctions against further violations of the federal commodities laws and against further trading.
The CFTC appreciates the assistance of the Fort Worth Regional Office of the Securities and Exchange Commission, which simultaneously filed a related emergency action against White and CRW.
The following CFTC Division of Enforcement staff members are responsible for this case: Charles Marvine, Christopher Reed, Michael Loconte, Rick Glaser, and Richard Wagner.
R. David Gary
Last Updated: March 5, 2009