It appears that the fifty-year sentence meted out to Fort Lauderdale Ponzi schemer-lawyer Scott Rothstein has had a impact amongst federal judges. Yesterday, a US District Judge in Charlotte, North Carolina* sentenced Keith Simmons to 50 years in prison, coupled with an order for restitution of $35.3m, in connection with what was known as Black Diamond, a purported foreign currency trading programme.
Simmons promised 48-137% return on investments, but spent most of the money on himself. More than 400 investors are believed to have ben victims of the Ponzi scheme. He paid out $18m in bogus interest payments to investors.
Bank compliance officers will be interested to know that a local bank, CommunityOne Bank, was fined $400,000, for failing to catch the Ponzi scheme, and for facilitating its operation. Just one more reason why it is in everybody's best interest to ensure that bank clients are periodically vetted, and that Enhanced Due Diligence is always to be applied in high-risk situations.
*United States vs. Simmons, Case No. 10-cr-00023-RJC-DCK (WD CAR)