US Men Plead Guilty In A $30 Million Forex Scam

They manufactured enormous trading losses to steal money from investors.

To avoid detection, they funneled the money through shell businesses.

Two US men pleaded guilty on Friday to their roles in a huge forex trading fraud and the loss of $30 million in investor deposits.

According to a news statement issued by the US Justice Department, each of them pled guilty to one count of conspiracy to commit securities fraud. Both are now facing a maximum jail sentence of five years, which will be decided by a US federal court judge at a later date.

Patrick Gallagher and Michael Dion, who live in Massachusetts and Florida, respectively, founded the firm Global Forex Management and conducted the fraudulent scam. They offered “huge profits” to investors and falsified past trading outcomes to get them to engage in the scam.

Both criminals convinced the victims that the cash would be utilized to trade foreign currency on an Internet trading platform offered by IB Capital, a business that turned out to be a co-conspirator in the scam.

“Instead, Gallagher and Dion were conspiring with other co-conspirators in the Netherlands to steal the victim investors' money,” according to the press release.

To successfully steal the cash of the investors, the offenders declared loss transactions in May 2012, which were created as part of the fraudulent plan. Gallagher and Dion then funneled the money through shell businesses they had established across the globe to successfully conceal the source of the funds.

Forex trading scams are common all over the globe, as investors often fall for the lofty claims of scammers. WikiFX revealed in August the $55 million FX trading fraud perpetrated by famous Thai Natthamon Khongchak, well known to her fans as 'Nutty.' She allegedly duped over 6,000 investors before fleeing the country.

Earlier this year, a US court imposed more than $29 million in restitution and penalties on forex and binary options pool fraud and the operators, Financial Tree, Financial Solution Group, New Money Advisors, and other scheme accomplices.

Meanwhile, Belgium's financial market authority has identified hundreds of illicit Forex and other trading platforms operating in the nation.

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