• Utah Man Arrested And Charged In Manhattan Federal Court With Commodities Fraud

    Author : Criminal Defense Associates May 6, 2016

    Utah Man Arrested And Charged In Manhattan Federal Court With Commodities Fraud 

    Who: Scott A. Beatty, owner of two investment companies, Peak Capital Management Group and Peak Capital Group (the “investment companies”), the Defendant.

    What: Beatty was charged by the Southern District of New York federal court with 1 count of commodities fraud (carrying a maximum sentence of 10 years in prison and a maximum fine of $1 million, or twice the gross gain or loss from the offense), and 1 count of wire fraud (carrying a maximum sentence of 20 years in prison and a maximum fine of $5 million, or twice the gross gain from the offense).

    Where: New York, New York. Beatty is from Roy, Utah, the primary place of business of the investment companies.

    When: The crimes allegedly happened between about January 2011 to June 2014. Peralta was charged on April 21, 2016.

    Why: Beatty allegedly solicited about 50 investors through misleading representations on his website, peakforex.com (the “website”), defrauding them out of close to a million dollars. He claimed to these investors that he was using the invested funds to trade in off-exchange foreign currency contracts, known as forex, but, investigations allegedly revealed that Beatty used only a fraction of the funds for forex trading.

    (The forex market represents the foreign exchange market, the “place” where currencies are traded. This market is the largest, most liquid financial market in the world.)

    Instead, Beatty used much of the funds for his own personal use, used his own money to pay “returns” on some investments and used new investor funds to pay back other investors.

    Beatty was the sole owner of the investment companies, and opened a bank account (the “account”) he used for the investor funds.

    How: Investors told law enforcement that Beatty convinced them he was an accomplished forex trading advisor earning high annual returns. Investigations revealed he was consistently unsuccessful in this forex trading and did this trading on a limited basis, much less than he seemed to represent to the investors.

    In fact, Beatty used just $125,000 of the $825,000 in investor funds for trading, and lost more than $71,000 of it.

    Beatty promised investors he would maintain individual accounts for each investor, but documents revealed he never did so, and instead deposited the funds into the single account.

    Beatty owned and maintained the domain and website www.peakforex.com and controlled at least 3 different email addresses from this domain.

    Numerous representations made on his forex website were proven false, such as the company’s historical trading performance, annual return statistics and the value of investments the company currently handled, which were grossly overstated.

    Many, if not all of these investors claimed that they chose Beatty based upon the representations made on the website. Investors also received monthly account statements from accounts that never existed, reflecting positive monthly returns.

    When investors attempted to redeem their investments, they were either given excuses or their attempts were completely ignored.

    However, instead of paying his investors, Beatty made cash withdrawals of investor funds from the account, and made debit card purchases of at least $517,000 for personal expenses such as restaurant and retail purchases. Records revealed that Beatty used new investor funds to pay back other investors, similar to a Ponzi scheme.

    When he was previously interviewed by the United States Commodity Futures Trading Commission (UFTC), Beatty claimed that he never made attempts to solicit customers for any managed forex accounts, and that the website never generated any investors.

    Beatty went as far as to include a section to potential investors in the website “warning” them of potential scams, urging them that “if it sounds too good to be true, it probably is.” He was correct.

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