The U.S. Securities and Exchange Commission filed charges against the head of a purported foreign currency trading firm, alleging he ran a Ponzi scheme.
The SEC alleged Jeffery Lowrance, who led First Capital Savings & Loan, raised $21 million from investors in at least 26 states and promised monthly returns of up to 7.15 percent through foreign currency trading, the watchdog agency said Friday in a release.
The SEC filed the fraud charges Thursday. The agency said Lowrance, who fled to Peru and was arrested there earlier this year, used most of the money to fund a start-up newspaper called "USA Tomorrow," according to the SEC.
"Lowrance ironically portrayed himself as a crusader against corruption in government, while he ripped off investors who put their trust in him," said Marc Fagel, director of the SEC's San Francisco regional office.
Lowrance's scheme began to fall apart in June 2008 and he and First Capital had lost all of the investors' money by September 2008, the SEC said. Still, Lowrance solicited at least an additional $1 million from at least 36 investors between June 2008 and February 2009 by pushing First Capital's fictitious high returns, the SEC alleged.
The SEC's lawsuit asked for court orders to bar the defendants from engaging in securities fraud and to require them to disgorge their ill-gotten gains and pay financial penalties.