Ponzi Endures With Lure Of Riches

fbi.gov, Mar 13, 2007

The sales pitch was seductive: the young visionary behind Brown Investment Services in Virginia guaranteed investors he would double their money in 30 business days by tapping into the complex world of foreign currency trading.

In investment seminars in the Richmond area last summer, James E. Brown Jr. freely displayed the trappings of his own financial success—luxury cars, jewelry, and a doting staff—as he educated potential investors about his expertise trading on the Foreign Currency Exchange Market (FOREX). Lingering doubts about the 21-year-old financial guru’s legitimacy were softened somewhat by happy investors who had already received their promised returns—and then some.

At its peak, Brown Investments had over 350 investors, including churches and small businesses, who entrusted the company’s president and owner with about $8 million. There was a major sticking point, however. While he dabbled a little in foreign currencies market, he was putting the majority of the money into his own bank account and paying “dividends” to old investors with the cash from new investors. This was a classic Ponzi scheme. Read more at fbi.gov.