(CN) – The owner of a phony foreign-currency “investment model” was convicted Friday of defrauding investors of millions of dollars. Robert David Watson, 50, who ran his “Alpha One” scam out of suburban Spring, faces up to 20 years in federal prison and a $5 million fine at his Sept. 23 sentencing.
Watson admitted that between 2003 and 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 selling 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 say Watson admitted it was a lie, that he made few trades and earned little, if any, profits. He sent sham account statements to investors claiming they were making money.
Watson paid himself hundreds of thousands of dollars a year for all this.
The SEC began investigating Watson in 2009. Prosecutors Watson impeded that investigation by fabricating bank statements and foreign currency trading records and producing them to the SEC in a final attempt to conceal his fraud.
Watson is free on bond pending sentencing.
Foreign exchange trading is a difficult and perilous way to make money, but forex scams have become a popular ruse of con men.