Feds freeze Texas investment funds, claiming fraud

The Commodity Futures Trading Commission has frozen the assets of two Texas investment funds it says are part of an $8 million foreign currency fraud.
Assets of M25 Investments, M37 Investments, Scott P. Kear, Sr., Jeffrey L. Lyon, all of Waxahachie, and David G. Seaman of Arlington were frozen by the order and a receiver appointed to identify assets, customers and amounts owed customers.
According to the CFTC, the defendants fraudulently solicited at least $8 million from about 224 customers in connection with forex trading and commodity futures contracts. The men ran the alleged scheme out of their offices in Texas, West Virginia and Mississippi, with many elderly customers who were found through church connections.
The men allegedly guaranteed monthly returns of 2 percent and annual returns of 24 percent and falsely claimed to be successful forex traders. However, they did not disclose to prospective and existing customers that a significant portion of their funds would not be used for trading. The defendants also did not disclose that as of at least March 31, 2009, they did not have sufficient assets to pay the promised monthly profits or return principal.
The case was brought in U.S. Federal court in Dallas earlier this week.
Here’s a copy of the complaint:
CFTC Complaint – M25 et al-09292009

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