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Saturday, May 18, 2024 | Back issues
Courthouse News Service Courthouse News Service

CFTC Has Twins Make Good on Ponzi Scheme

DALLAS (CN) - Twin brothers must return the $2.4 million generated by a foreign currency Ponzi scheme, the U.S. Commodity Futures Trading Commission ruled.

In a 2011 complaint, the CFTC accused Rodney Wagner, Roger Wagner and GID Group Inc. of concealing their misappropriation of investment funds.

Claiming that they were experienced and successful traders who made daily 6 percent returns, the Grand Prairie, Texas-based brothers pulled in more than $5.5 million from 99 investors for forex trading, the CFTC said.

It added that some of the stolen funds were used to pay the brothers' personal expenses and the purported returns of other pool participants.

"To conceal their fraud the Wagner brothers distributed false account statements to customers that reported returns supposedly earned as a result of the brothers' forex futures trading," the CFTC said in a statement.

A consent order that U.S. District Judge David Godbey entered last week concludes that the Wagners placed only $590,000 into trading accounts and sustained at least $443,000 in net losses.

"The Wagner brothers generally solicited members of their church congregation and the members' families, friends and acquaintances," Godbey wrote. "In order to trade, GID required actual and prospective customers to execute an agreement and deposit a minimum amount of funds, typically $10,000, into a bank account held in the name of GID at JP Morgan Chase Bank."

Godbey ordered the defendants to pay $1.37 million in restitution and $1.05 million in penalties. They are also subject to permanent trading and registration bans. None of the defendants have ever been registered with the CFTC.

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