SEC Charges South Florida Man And Woman In $30 Million Ponzi Scheme

The Securities and Exchange Commission today charged two South Florida residents for conducting a $30 million Ponzi scheme with funds primarily raised by offering and selling unregistered investment contracts and promissory notes to hundreds of investors nationwide from 2005 until the summer of 2007.

The SEC alleges that James Clements and Zeina Smidi of Plantation, Florida, through the companies they jointly controlled: MRT, LLC; MRT Holdings, LTD; and Maximum Return Transaction, LLC, collectively “MRT”; operated a Ponzi scheme that offered investors guaranteed monthly returns as high as 11%. From 2005 until the end of 2006, MRT, Clements and Smidi told investors that MRT used investor proceeds to trade foreign currencies and touted MRT’s investment success to draw in new investors. The SEC’s complaint further alleges that MRT and Clements used certain investors who agreed to be “account managers” to solicit hundreds of investors through informal gatherings and word of mouth.

According to the SEC’s complaint, Clements explained that from the foreign currency trading profits, MRT would pay a small percentage of each investor’s returns to the investors’ account manager, pay each investor their promised rate of return, and keep any excess profits. Clements and account managers referred investors to Smidi who provided investors information on how to effect their investment in MRT and where to wire funds.