Forex Scammer Behind Bars, Fined Over $33 Million

Jan 15 2007 | 10:44am ET

Russell Cline of Portland, Oregon, was ordered by a judge last week to pay fines totaling over $33 million in relation to a bogus forex trading scheme, according to the Commodity Futures Trading Commission.

Cline and his company, Orion International, in December 1998 fraudulently solicited investors to the tune of over $40 million to invest in a foreign currency fund. Cline solicited investors to purchase illegal off-exchange forex options and futures contracts by misrepresenting the profits and risks involved in forex trading. He pocketed most of the cash to pay for personal expenses as well as to pay his cohorts who took part in the scheme.

As part of the scheme, investors were given false account statements and false information on Orion’s Web site regarding trading profits, market conditions and opportunities, the balances in individual investor’s accounts, and the reasons for delays in their withdrawals. Cline also used over $13 million in funds to pay other investors fictitious profits on their investments.

In May 2004, a federal grand jury in Portland issued a criminal indictment against Cline, charging him with 39 counts of mail fraud, wire fraud, and money laundering. After Cline plead guilty to two counts of mail fraud and one count of money laundering, the court sentenced him to eight years in prison and ordered him to pay a restitution of $16.5 million. The new fines are in addition to the $16.5 million he already owes.

Cline is currently behind bars serving his sentence. It is not known how he pay the fines.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…