http://www.nickryan.net/articles/followthemoney.html
(...)
A self-proclaimed "man of God", most had met Ferdig through his extensive Christian networks – just like Jewish investors were to meet to the now-notorious New York financier, Bernie Madoff, who ripped them off to the tune of billions of dollars. What Lee did not know was that Ferdig had been involved for many years with the controversy-dogged Californian evangelical group, the Worldwide Church of God. While Ferdig was "personal assistant" to the Church founder Herbert W. Armstrong during the 1970s, numerous sexual and financial scandals had erupted.
Unbeknownst to his flock, Ferdig had had his share of wives and concubines, too – even a fake wedding to one poor lady he duped – and cavorted with young Caribbean women as he flitted between the States and various small islands, running his Tradex empire.
Lee was unaware of the former Navy SEAL bodyguards now shadowing Ferdig, as his paranoia over assassination by Chinese gangsters or disgruntled investors grew; or that several of these leading investors (most of whom still supported the preacher) were what investigators would later term “birddogs”, financially rewarded by Ferdig for sales. Ferdig's trader, Susan Lok, had never been working from Singapore, either: she was operating from a suburban house in Glendale, California and passing all monies through her father's personal account.
But the hundreds of thousands recorded every month was only a fraction of the entire sum going to Art Ferdig – the rest was being recycled out as “fake” interest payments to investors, or siphoned off via a tangled web of offshore companies to the Ferdig family and associates, as part of a massive “Ponzi” scheme.
Named after 1920s con-man Charles Ponzi, Ponzi fraudsters would steal investors’ money and return a fraction as fake interest/profit, to keep them hooked. All they needed was a grand-sounding proposal, promising great returns: but in reality without any genuine economic activity. It was one of the most commonly-used frauds; favoured by sophisticated swindlers to rip off billions of dollars from hapless investors every year. It went without saying that James Lee and his colleagues had no idea that organised criminals had been washing their dirty money through Tradex (a common Ponzi tactic), or that Rita Laframboise – standing in front of them right now – was in fact a “reloader”, a fake investigator in cahoots with the con-man.
In fact, Tradex had been a classic example of an old-style confidence game, its operators right out of Hollywood’s Central Casting. The 'Ferdig Gang' – evangelist Art and his daughter-in-laws – operated under various pseudonyms across the US and Caribbean tax havens. As regulation tightened in one territory, they'd simply hop to another, working their way down the West Indian island chain. Using the Ponzi model, the Tradex fraud deceived laypeople who had no in-depth knowledge of the investment world, using dazzling descriptions of financial constructs, and asset-holding plans, that sounded impressive but were essentially meaningless.
Over 600 investors, mostly residents of the United States, fell for the scheme and its impressive marketing materials. In well-crafted letters and brochures, the Ferdig Gang made use of the plural possessive pronoun “we” when referring to Tradex, as in: “We focus on achieving consistent growth and client loyalty;” “We have an exemplary and remarkable record – 84 consecutive months of profitable trading without a single losing effort; and “We trade currencies through administrators in Singapore. Your capital will normally be trading within 5 (five) days after receipt of cleared funds.”
The Ferdig Gang created the illusion of paying out these astronomically high “returns” to its investors, but such “payments” usually represented only paper profits that consisted of mere journal entries on falsified account statements. However, the false monthly account statements looked so rewarding that most Tradex investors chose to reinvest their money, while all the time believing they were earning thousands if not millions of dollars in profits (which of course never existed).
The members of this Ferdig Gang included its patriarch, Art Ferdig, and his wife, Elaine. The Ferdig Gang also comprised the couple’s three adult daughters – Alisa, Deborah, and Rachel – as well as their daughter’s husbands, Jeff Lockhart, Michael Elliott, and David Riotte. Throughout the life of Tradex, the gang flew in private aircraft and purchased homes and estates in California, The Bahamas, Dominica and lastly Jamaica, where they bought hundreds of acres of tropical forests with breathtaking views of the azure sea. Later, after the Tradex party ended, they purchased homes in Florida, Louisiana and Texas, as well as cars, sailing yachts and a marina slip. Where the money to finance such an ample life style came from, the hapless Tradex investors had little way of knowing.
All had been sunny until...
(((Well, until last week, really:)))
via @ryanscribe, who wrote that article for WIRED
