Co-owner of North Carolina Company Arrested for Defrauding Commodities Trading Investors of More Than $3.2 Million
WASHINGTON – The principal and co-owner of Integra Capital Management LLC, a North Carolina company, was arrested in Denton, N.C., today for defrauding commodities trading investors of more than $3.2 million, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Anne M. Tompkins of the Western District of North Carolina.
Nicholas Cox, 34, a North Carolina resident, is charged in an indictment returned on May 17, 2011, by a federal grand jury in the Western District of North Carolina, with one count of conspiracy to commit mail fraud, seven counts of mail fraud and one count of conspiracy to commit money laundering. Following his arrest, Cox made his initial appearance today before U.S. Magistrate Judge David Cayer in Charlotte, N.C.
The indictment alleges that between September 2006 and January 2009, Cox and his co-conspirator, Rodney Whitney, who was also a principal and co-owner of Integra, engaged in a scheme to defraud investors in commodity trading pools operated by Cox and Whitney through Integra. According to the indictment, Integra was established for the purpose of pooling investors’ funds in commodity pools, and investing in commodity futures and foreign currency exchange (forex) trading. Cox and Whitney allegedly provided false and fraudulent information, including prospectuses, contracts, tax forms, account statements and other documents, to current and prospective investors to obtain and misappropriate more than $3.29 million in investor funds.
According to the indictment, Cox and Whitney falsely represented, among other things, that Integra’s managers had more than 30 years of combined market experience; that Integra paid dividends of 2 to 5 percent of the investor’s initial investment, which was derived from Integra’s trading profits; and investors could remove their principal investments within five days upon giving notice to Integra. The indictment alleges that Cox and Whitney used the monies invested by later investors to pay promised monthly investment returns to earlier investors, to purchase real estate, to fund other business ventures, and to purchase automobiles and other personal goods and services.
Whitney was charged on March 2, 2011, in a criminal information for his role in the scheme. On March 21, 2011, Whitney pleaded guilty to one count of conspiracy to commit mail and wire fraud and one count of conspiracy to commit money laundering.
The maximum sentence for each count of mail fraud and conspiracy to commit mail fraud is 20 years in prison. The maximum sentence for each count of conspiracy to commit money laundering is 10 years in prison.
The case is being prosecuted by Trial Attorneys Nicole H. Sprinzen and Luke B. Marsh of the Criminal Division=s Fraud Section and Benjamin Bain-Creed of the U.S. Attorney’s Office for the Western District of North Carolina. The case is being investigated by the U.S. Postal Inspection Service.
An indictment is merely a charge and defendants are presumed innocent until proven guilty.
This prosecution is part of efforts underway by 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. For more information about the task force visit: www.stopfraud.gov.