Beau Diamond of Sarasota, son of “Fit for Life” health guru Harvey Diamond, was charged last week in federal court with wire fraud and money laundering.

The U.S. Attorney’s Office in Tampa alleges that Diamond engaged in a fraudulent Ponzi scheme involving foreign currency (or “Forex”) trading. They claim that about 200 investors contributed nearly $38 million to the younger Diamond for trading. Unfortunately, all of the funds were allegedly dissipated through Ponzi distributions, losing trades, and diversions to Diamond for his personal benefit.

Prosecutors claim that from at least April, 2006, to the present, Diamond falsely guaranteed investors the return of their principal plus monthly returns ranging from 2.75 percent to 5 percent purportedly paid from successful forex trading. In reality, Diamond lost $13.3 million of the investors’ funds and then concealed the loss by providing investors with false account statements showing that their accounts were increasing as promised.

Simultaneous with Diamond’s arrest on criminal charges, the U.S. Commodity Futures Trading Commission (CFTC) announced that it obtained an emergency federal court order freezing his personal and business assets and prohibiting the destruction of relevant documents.

This was probably not a big surprise for Diamond. He and his father were sued in Sarasota civil court back in January over the same situation. The civil lawsuit claimed the Diamonds engaged in a Ponzi scheme, promising 5 percent monthly returns and alleged that returns were paid not out of investment profits but from principal and new investor contributions.

Felonies, White Collar Crimes

This entry was posted on Wednesday, September 9th, 2009 at 8:01 am and is filed under Florida Criminal Law News. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.