FLORIDA — A Florida man has pleaded guilty for his role in a $30 million Foreign Exchange Fraud Scheme, the U.S. Department of Justice has announced.
According to court documents, Michael Dion, 49, of Orlando, Florida, and Patrick Gallagher, 44, of Middleborough, Massachusetts, devised a scheme in which they would solicit victims to invest in their foreign exchange company, Global Forex Management, by promising them large returns based on previous trading results that they had fabricated.
According to the Department of Justice (DOJ), the men told the victims that their funds would be traded using an online trading platform provided by a co-conspirator’s company, IB Capital.
Instead, Gallagher and Dion were working with other co-conspirators in the Netherlands to steal the victim investors’ money, the DOJ said.
According to court documents, in May 2012, Gallagher and Dion executed their scheme by intentionally creating losing trades for the investors and effectively stole $30 million from their victims. After fabricating the massive trading loss, Gallagher and Dion routed the stolen money through shell companies they had set up all over the world.
Gallagher and Dion each pleaded guilty to one count of conspiracy to commit securities fraud, and each face a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division and Inspector in Charge Eric Shen of the U.S. Postal Inspection Service’s (USPIS) Criminal Investigations Group made the announcement.
The USPIS is investigating the case.
Trial Attorneys Brittain Shaw, Vasanth Sridharan, and Tian Huang of the Criminal Division’s Fraud Section are prosecuting the case.
