Three Men Indicted for $30 Million Foreign Exchange Fraud Scheme | OPA

A federal grand jury in the Southern District of Florida returned an indictment Thursday charging two U.S. citizens and a Dutch national with conducting a foreign exchange trading scheme to steal $30 million from their investor victims.

According to court documents, Patrick Gallagher, 44, of Middleborough, Massachusetts, Michael Dion, 49, of Orlando, Florida, and Emade Echadi, 41, a resident of the Netherlands, allegedly devised a scheme in which Dion and Gallagher would solicit victims to invest in their foreign exchange company, Global Forex Management, by promising them large returns based on fabricated prior trading results. The defendants allegedly told the victims that their funds would be traded using an online trading platform provided by Echadi’s company, IB Capital. However, according to the indictment, Gallagher, Dion, and Echadi instead were working together to steal the victim investors’ money. In May 2012, they allegedly executed their scheme by intentionally creating losing trades for the investors and stole $30 million from their victims. After fabricating the massive trading loss, the defendants allegedly concealed the scheme from victims by creating fraudulent trading records and then routed the stolen money through shell companies they had set up all over the world.

The defendants are charged with conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering. If convicted, the defendants face a maximum penalty of five years in prison for conspiracy to commit securities fraud and 20 years in prison for each of the other charges. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division, and Inspector in Charge Delany E. De Leon-Colón of the U.S. Postal Inspection Service made the announcement.

Trial Attorneys Brittain Shaw and Vasanth Sridharan of the Criminal Division’s Fraud Section are prosecuting the case.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.