A Spring man plead guilty today to running a bogus investment scheme that produced a lot of account statements to customers showing great profits as he pocketed their money.
Robert David Watson, 50, told investors his "Alpha One" method of investing in foreign currencies was da bomb, and got almost a 25 percent annual return between 2006 and 2009.
And he had the paperwork to prove it. Then again, it's pretty easy to print up a financial statement showing big profits when you're pulling the numbers out of your ass.
Behold Alpha One in all its glory, as described by the U.S. Attorney's Office:
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[Watson] made a minimal number of trades and earned little if any profits. Nevertheless, he caused periodic, sham account statements to be sent to investors...that purportedly tracked returns from trading profits, when in fact the statements did not reflect real trades or account values. To make those sham account statements appear legitimate, he prepared phony statements of trading activity and bank accounts, which he provided to the entities' insiders and employees and showed to inquisitive investors.
When investors withdrew supposed returns or their principal investments, he admitted he caused them to be paid with funds raised from other investors, not profits from foreign currency trades. Although he did minimal trading, Watson paid himself lucratively, receiving hundreds of thousands of dollars annually during the scheme.
Well, of course he paid himself lucratively. Those statements didn't just create themselves, did they?
Watson admitted he had raised "tens of millions of dollars" from investors," prosecutors say.
He faces up to 20 years in prison and $5 million fine and will be sentenced in September.