United States Attorney James T. Jacks
Northern District of Texas

TUESDAY, JUNE 8, 2010
http://www.usdoj.gov/usao/txn/

MANSFIELD, TEXAS, MAN ADMITS COMMITTING COMMODITIES FRAUD
INVOLVING FOREIGN CURRENCY TRADING

Ray M. White Faces Up to 10 Years in Federal Prison and a $1 Million Fine

DALLAS — Ray M. White, 51, pleaded guilty today before U.S. Magistrate Judge Paul D. Stickney to a criminal information charging one count of commodities fraud, announced U.S. Attorney James T. Jacks of the Northern District of Texas and Assistant Attorney General Lanny A. Breuer of the Criminal Division. White faces a maximum statutory sentence of 10 years in prison, a $1 million fine, and restitution. He is scheduled to be sentenced by U.S. District Judge Barbara M.G. Lynn on September 17, 2010.

In the factual resume filed in the case, White admitted that, in July 2008, he contracted with an investor to sell $50,000 in commodities through CRW Management LP, which White operated in Mansfield, Texas. White was CRW’s president, general partner and agent. White admitted that, from July 2008 until January 2009, he knowingly and willfully cheated and defrauded, made false statements to, and deceived the investor by making several misrepresentations in connection with the contract to sell commodities.

White represented to the investor that his funds would be used to trade off-exchange foreign currency contracts (forex) and that CRW averaged a 7% per week returns through forex trading. He provided written account statements showing purported returns, and represented to this investor that CRW would maintain separate bank accounts for each investor. These account statements were false, and White did not maintain separate bank accounts for the investors.

The vast majority of the funds were never used to trade forex; White admitted to either misappropriating investor funds or paying them to other investors in the form of Ponzi payments. White admitted losing more than $86,500 on forex trading, in sharp contrast to the 7% per week profits he claimed.

 According to March 2009 emergency civil enforcement actions (complaints) filed in the Northern District of Texas by the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), from late 2006 until March 2009, White solicited at least $10.9 million from more than 250 investors to trade in the foreign currency market. The SEC and CFTC complaints further allege that CRW never traded forex, and that White lost money in the limited forex trading in which he engaged. Of the $10.9 million White raised, he used at most $93,900 to trade in the foreign currency market. The remaining $10.8 million was either misappropriated or returned to CRW customers as part of the Ponzi scheme. The complaint filed by the SEC states that White used the funds to finance his son’s car-racing career, to purchase a company called Hurricane Motorsports, LLC, in Arlington, Texas, and to purchase a home and other real property.

The complaints also state that White was never registered with the SEC or the CFTC and has never been licensed to sell securities. While White led investors to believe that his special expertise in trading foreign currencies would yield exceptional returns, in reality he was not a successful foreign currency trader and had no lucrative foreign currency trading fund or program. In fact, he filed bankruptcy in 2003 and in 2006, a fact he concealed from investors.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The case was investigated by the CFTC, the SEC, the FBI and the U.S. Postal Inspection Service.

Assistant U.S. Attorney Alan Buie, Trial Attorney Bill Bowne, of the Criminal Division’s Fraud Section, and Special Assistant U.S. Attorney Stephanie Tourk are prosecuting.

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