In our previous article, we covered the story of Russell Cline and how he scammed his investors off $16 million that he used to enrich his own lifestyle. Today, we bring you the story of another such person named Richard Matthews Jr., who pooled in over $30 million from his investors.

White Pines Trust Corporation

Matthews founded White Pines Trust Corporation in 2000 in San Diego, and using his marketing skills, convinced investors to pool in $30 million. He promised them a cumulative return of 91% over a period of eight years, and also guaranteed that 75% of their investments were protected from loss by means of a number of different investments.

As it turned out, all those claims were fraudulent and he had absolutely no intention of ever returning them this money. In fact, he never even had any knowledge of the currency business. He went straight ahead, and instead, bought himself a large property off the coast of Belize.

The Lawsuit

When Matthews’ company WPT was sued, he tried to wiggle his way out by claiming things such has the CFTC (the suing party) had no jurisdiction over the matter and other minor technicalities such as the language used and the fact that Matthews had not himself sent the email that was presented in the court as evidence.

However, the court saw through the charade and considered major fallacies in the company’s claims such as “WPT had been managing private assets through the Pinnacle Capital Fund since 1995, and that the Pinnacle Capital Fund had yielded double-digit profits on investments for each year since 1995,” and many others which clearly pointed out that the chief purpose of Matthews was to encourage people to invest in his company by giving the false information and providing fictitious references.

The Verdict

Matthews finally pleaded guilty to illegally soliciting funds from investors and mail fraud in April 2005 and admitted that he had spent millions of funds on other purposes unrelated to currency trading. He was ruled to pay more than $29 million in monetary penalties and restitution.

Upcoming Story

In the next article, we will cover the story of Joel N. Ward who is sentenced to nine years in Federal prison for fraud and money laundering. Learn how he coned more than 100 clients and later pleaded guilty, and calls himself “a financial serial killer.”



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