(CN) - A Texan from the Houston suburb of Spring was sentenced to 20 years in federal prison for securities fraud, and ordered to pay $22 million in restitution to his victims.
Robert David Watson, 50, was given the maximum sentence.
Watson pleadedguilty to securities fraud in June 2011, for his role in a foreign exchange scam.
Watson admitted that from 2003 to 2009 he used "manipulative and deceptive devices and contrivances," to take tens of millions of dollars from investors under the pretense that he would buy and sell foreign currencies.
Watson claims that his Alpha One trading program never lost money, and earned annual returns of 23 percent from June 2006 to February 2009.
But prosecutors said Watson eventually admitted it was a lie, that he made few trades and earned few, if any, profits. He sent sham account statements to investors claiming they were making money.
"When investors withdrew supposed returns or their principal investments, he admitted he caused them to be paid with funds raised from other investors, not profits from foreign currency trades" prosecutors said in a statement. "Although he did minimal trading, Watson paid himself lucratively, receiving hundreds of thousands of dollars annually during the scheme."
The SEC began investigating Watson in 2009. Prosecutors said Watson impeded the investigation by fabricating bank statements and foreign currency trading records and producing them to the SEC in a final attempt to conceal his fraud.
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