Darren Anthony Robinson, 53, had been charged in Panama but vanished after removing his GPS tracker, authorities said.
According to prosecutors, Robinson ran an investment company named QYU Holdings in Panama and the Cayman Islands, claiming that the company would yield great profits from trading foreign currency. To lure investors, Robinson presented a fictitious QYU document stating that if they had put US$100,000 in its fund in 2014, it would have grown to over $2 million by 2021, without any monthly losses.
Investors in QYU were promised definite returns and were told that the company made money only from the profits generated through trading activities in the foreign currency exchange market.
However, authorities claim that QYU functioned as a Ponzi scheme, where investor funds were largely diverted from actual trading activities.
A Ponzi scheme is a type of financial fraud in which an initial set of investors is paid using money from subsequent investors. The organizers of Ponzi schemes often make promises of investing people’s money and generating high returns with minimal or no risk.
However, the fraudsters do not actually invest the money as promised. Instead, they use the most recent funds to pay off earlier investors, keeping some of the money for themselves.
Ponzi schemes rely on a continuous influx of new money to sustain themselves since they have little or no legitimate earnings. When it becomes difficult to attract new investors or when a large number of existing investors try to withdraw their funds at the same time, the schemes collapse, said the U.S. Securities and Exchange Commission, an U.S. agency which regulates laws regarding financial market manipulation.
U.S. authorities said that Robinson, in addition to using new money to pay off old investors, allegedly used the funds to cover QYU's business expenses, pay its employees, and sustain his lifestyle.
Additionally, to show that the company was legitimate, QYU investors allegedly received fake transaction statements and fake trading data.
If caught, Robinson could face up to 20 years in prison on each of the wire fraud counts and 10 years on the money laundering charge.
