Fraudulent Spot Foreign Currency Traders Plead Guilty and Forfeit over $28 Million in U.s. Currency and Property
BRADLEY DAVID EISNER and MICHAEL RICHARD MacCAULL pleaded guilty this afternoon to engaging in a multi-million dollar scheme to defraud investors in the spot foreign currency exchange market. Under the terms of their respective plea agreements, the defendants each face a maximum sentence of 20 years’ imprisonment and a $250,000 fine. As part of their guilty pleas, the defendants have forfeited to the United States over $28 million in U.S. currency and property. The guilty plea proceedings were held before United States Magistrate Judge Joan M. Azrack at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York. The case has been assigned to United States District Judge Dora L. Irizarry.
The guilty pleas were announced by Benton J. Campbell, United States Attorney for the Eastern District of New York, and Ronald Verrochio, Postal Inspector in Charge, New York Division.
Beginning in 2001, the defendants held themselves out as traders on the foreign currency exchange market, also known as the forex market, and solicited investments from the public through their company, Razor FX. From shortly after its inception, however, Razor FX began operating as a fraud on its investors, with almost no trading in the forex market being conducted. Instead, the defendants simply deposited the investments in a bank account, from which they paid their personal living expenses, including luxury homes and automobiles. To conceal the scheme, the defendants sent out phony account statements to investors reporting non-existent trades and profits. Whenever investors sought to withdraw funds, the defendants paid them from funds received from other investors. On occasion, in order to reduce their liabilities to investors, the defendants reported phony trading losses – a practice they referred to as “squashing” the accounts.
Over the course of the scheme, EISNER and MacCAULL took in more than $100 million from investors, returned tens of millions of dollars to investors in order to perpetuate the scheme, and retained or spent the remaining funds.
The government’s case is being prosecuted by Assistant United States Attorneys Richard T. Faughnan, Kathleen Nandan, and Brendan King.
BRADLEY DAVID EISNER
MICHAEL RICHARD MacCAULL
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