A Mableton man has pleaded guilty to 10 counts of wire fraud for orchestrating a multi-million dollar foreign exchange market Ponzi scheme, federal authorities said.
Stafford S. Maxwell, 46, the former owner and CEO of Millennium Capital Exchange, Inc., “lured investors to his forex firm with bravado and false promises of trading success,” acting U.S. Attorney John Horn said, and “used lies and deceit to fleece people of their savings.”
In the end, authorities said, Maxwell spent or lost almost every dollar invested with him.
Sentencing for Maxwell is scheduled for Sept. 2 in U.S. District Court.
In 2007, Maxwell started Millennium, purported to be a trading firm on the foreign exchange market where participants including banks, investment management firms, brokers, hedge funds and individual investors buy, exchange and speculate on currencies.
From about 2008 to January 2012, authorities said, Maxwell solicited investments from individuals promising high fixed rates of return resulting from his trading. He falsely stated that he was an excellent forex trader with a long history of forex trading success, the government said.
He assured investors they would earn an annualized rate of return of 48 percent to 72 percent. And he said he took measures to insure that the gains would be large and any losses small, the government said. He also said he had reserve funds that would enable him to cover any losses.
Authorities said, however, that Maxwell actually had little success making forex trades, had lost almost all the money that he traded in the market, and that he was unable to pay investors the promised investment dividends. He also had no reserve fund to cover losses.
Investors wired Maxwell more than $1 million, expecting that the funds would be traded in Swiss accounts, the government said. He used about half of the money for other improper purposes.To make it appear that he was successful, he used the money received from new investors to pay “dividends” to older investors. Then he used the money received from investors for trades to pay his own personal living expenses.
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