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Beau Diamond ran a a $36.5 million Ponzi scheme in Florida which stole money from 200 investors who trusted him with money for trading on the foreign currency exchange.

09/12/09 - TAMPA - A Sarasota man charged with carrying out a $36.5 million Ponzi scheme should be held without bail while his case is pending, a federal judge has ordered.

Beau Diamond, 31, faces fraud and money laundering charges. Authorities say he promised investors a handsome profit for giving him money to trade on the foreign currency exchange.

He gave them incentives to invest more and paid bonuses to those who brought him new investors. At the end of 2½ years, when everything came apart, Diamond had taken more than $36.5 million from 200 investors, according to a criminal complaint.

The complaint states he used $2.2 million of the money to live lavishly, paying for a $200,000 Lamborghini, a waterfront condominium in Sarasota and a high-end home in Newport Beach, Calif. He also lost hundreds of thousands of dollars gambling in Las Vegas.

Some of the money was used to perpetuate the Ponzi scheme, paying investors what he said was profit. The remaining $15.4 million was lost in currency trading, the complaint states.

Diamond tried to keep his victims from going to court by holding out the possibility of reimbursement. "The only result of this lawsuit will very likely be a federal investigation, which right now has NOT been initiated," he wrote in an e-mail Jan. 22. "If that starts, I am done. There is nothing I can do to get funds back to everyone. No one will ever see a penny, and I most likely will be behind bars."

U.S. Magistrate Thomas B. McCoun III has ordered that Diamond remain behind bars.

McCoun denied Diamond's request that he be allowed to live with his father and work for his mother. Diamond's father was willing to deposit $50,000 in an account to secure his son's release, and both parents were willing to sign a $500,000 bond pledging that amount should their son flee.

The judge concluded the signature bond was "rather illusory." Although both parents live in "properties with sizable market values," both homes are under foreclosure, he said. "Neither parent appears capable of maintaining the monthly expenses for those properties nor satisfying any sizable surety bond.

"The court is not left with a secure feeling in light of the nature of the allegations, the extent of the monies allegedly fraudulently procured by the defendant, and the potential punishment in the case. At present, the court finds that the Defendant is a risk of flight and his request for bond is denied."

The U.S. Commodity Futures Trading Commission has sued Diamond and his company, Diamond Ventures, asking for an injunction barring them from any commodities trading and for an order requiring them not to destroy any financial records.

The lawsuit also seeks an order requiring restitution for all investors, and fines and penalties against Diamond and his company.

http://www2.tbo.com/content/2009/sep/12 ... scam-case/

Bank Of America Accused Of Enabling Ponzi Scheme

10/27/09 - Did Bank of America (BAC) boost a Ponzi scheme?

That's what a new Florida class action suit says, alleging that BofA "aided and abetted" a $37 million foreign exchange fraud run by disgraced wealth adviser Beau Diamond (pictured) and his investment club Diamond Ventures.

"From the beginning, BOA actively assisted Diamond's fraudulent scheme," the suit says, noting the bank's 32 month alliance with Diamond. "Despite an intimate understanding of Diamond's fraudulent enterprise, BOA asked no questions and instead bolstered its relationship."

According to the FBI, Diamond's forex trading scheme stole from 200 victim investors who contributed nearly $38 million into Diamond's fund, "all of which was dissipated through Ponzi distributions, losing trades, and diversions to Diamond for his personal benefit."

Many of the investors lost their live savings and want the money back.

As Courthouse News notes, BofA allegedly facilitated the fraud by allowing offshore wire transfers, commingling of accounts, access to unlicensed trading in foreign exchange markets, and a banking platform that facilitated conversion of investors' funds. And BofA's "Premier Bankers" authorized wire transfers of more than $700,000 to Diamond's personal account, according to the complaint, including charges at big Las Vegas hotel-casinos.

As we've written, Diamond faces federal charges of wire fraud and money laundering after his foreign currency trading business fell apart in January 2009. And CFTC is after him too.

Shirley Norton, a BofA spokesperson, said the bank hadn't reviewed the suit yet and therefor wouldn't comment.

http://www.businessinsider.com/bank-of- ... me-2009-10

Read the complaint at http://www.scribd.com/doc/21703052/BofA ... ass-Claims