Federal authorities have accused an Arizona man of running a Forex Ponzi scheme that mixed in elements of cash-gifting and tax fraud.

U.S. District Judge David C. Bury ordered an asset freeze against Anthony Eugene Linton (Gene Linton) of Tucson, based an an emergency complaint filed by the CFTC.

Linton was accused of telling investors he had a software system that made Forex trading losses impossible. Despite the claim, the CFTC said, [W]hat little forex trading Linton did using customer funds resulted in consistent net losses, and, in the aggregate, he lost more than 90 percent of the funds traded.

This may prove to be a new or emerging kind of Forex fraud and an emerging form of "fraud creep" -- one that demonizes law enforcement/regulators, mixes in elements of various forms of fraud and creates a bizarre, new form of fraud all under one roof.

For example, Linton allegedly told some investors that the money they gave him to invest using his miraculous software system was a "gift" to his company and that returns they earned were "gifts" from the company back to them.

When the scheme was collapsing, according to CFTC, Linton told investors that payments to them were delayed by "new restrictions" imposed by Congress and the National Futures Association.

Recently the PP Blog published a story on what it is describing as "fraud creep." The Blog provided a principal definition for "fraud creep" and four associated definitions, one of which is this:

"A form of deceit (fraud-creep plan) employed by hucksters, particularly on the Internet, characterized by efforts to popularize an illicit pursuit by withholding critical information and demonizing market regulators. Profits are reaped by tapping into disillusionment and despair and creating a bogeyman or figure of blame to rationalize participation in a dubious or illegal enterprise. The bogeyman or figure of blame often may be the government, a branch of government, a law-enforcement or regulatory agency or government employee."

So, the Linton case might be an example of fraud creep in that the accused schemer allegedly blamed both the Congress and NFA for his troubles -- AFTER telling investors that he had a fool-proof, computerized trading system and the ability to block the IRS from collecting taxes by declaring the investment transactions were "gifts."

PP Blog