Ageless Defendant Named in Federal Criminal and CFTC Complaints

April 14, 2011

It was only a couple of weeks ago that I wrote about David A. Smith, 41, a Jamaican citizen who was living in the Turks and Caicos Islands, who ran a foreign exchange ("FOREX") Ponzi scheme that reaped over $200 million from some 6,000 defrauded investors.  FOREX Pirate's Ponzi Scheme Ends In U.S. Brig. Smith pleaded guilty to four counts of federal wire fraud; one count of conspiracy to commit money laundering; and 18 counts of money laundering.

Just when you thought it was safe to go back into the water - or into FOREX - another lurid story of an alleged rip-off scheme surfaces.

Criminal Complaint

According to a federal criminal Complaint, Lyndon Lydell Parrilla, 31, of Los Angeles, is charged with wire fraud arising out of the operation of Green Tree Capital., through which more than $5 million was solicited from customers, purportedly for the purpose of trading in the foreign currency exchange (FOREX) market.

The criminal Complaint alleges that notwithstanding the representations that the victims' funds would be traded in FOREX, Parrilla traded, at most, only a small portion of customer funds.  Instead of using the funds as promised, Parrilla spent most of the money on personal expenses, including more than $950,000 at casinos and approximately $130,000 to purchase a car.

The criminal Complaint charges that between October 2009 and February 2011, Parrilla also withdrew more than $2.1 million in cash from Green Tree customer accounts. During that period, Green Tree continued to e-mail account statements to customers purporting to show trading gains and losses. In many instances, the account statements fraudulently showed that customers' accounts had gained value through successful FOREX trading.

Parrilla, was arrested on April 12, 2011. If convicted, Parrilla faces up to 20 years in prison, three years of supervised release, and a $250,000 fine.

NOTE: The details contained in the federal criminal complaint are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

CFTC Complaint

In a separate six-count United States Commodity Futures Trading Commission ("CFTC") Complaint against Green Tree and Parilla, the CFTC charges that from approximately October 2009 to the present the Defendants others with cheating and defrauding at least 50 customers in the United States who invested at least $4 million, including deposits wired into bank accounts for the purported purpose of trading off-exchange FOREX on a leveraged or margined basis in managed accounts. The CFTC Complaint alleges that Parrilla is directly liable only for the misappropriation of at least $2.9 million of customer funds. 

According to the CFTC Complaint, Green Tree Capital is a Nevada corporation that was incorporated on June 16, 2008, with registered addresses in California and Nevada. Green Tree became active in October 2009 and  has acted as an unregistered CTA by soliciting customers or potential customers for the supposed purpose of trading forex in leveraged transactions. It is further alleged that since October 18, 2010, Green Tree engaged in the cited conduct without the benefit of a CFTC registration

Parrilla, President, Secretary, Treasurer, and Director of Green Tree, was registered with the CFTC as an associated person ("AP") of Parman Financial from April 18, 2006 until December 21, 2009, when the National Futures Association ("NFA") suspended Parrilla's registration. Parrilla withdrew from registration as an AP of Parman Financial on January 5, 2010, and the NFA permanently barred Parrilla from registration on January 14, 2010. Parrilla has not been registered in any capacity with the Commission since January 5, 2010.

SIDE BAR: The CFTC's Complaint states that Parilla is 29-years old. The criminal Complaint states that he is 31. You'd sort of think that the criminal prosecutors and the CFTC regulators could agree on how old their key defendant is. 

NFA suspended Parman Financial's membership and registration on December 21, 2009; Parman Financial withdrew its registration on January 5, 2010; and the NFA permanently barred Parman Financial from membership on January 14, 2010.

The CFTC Complaint alleges that when soliciting customers, Green Tree and others made false representations regarding Green Tree's profitability and track record. For example, it is asserted that fraudulent representations were made that Green Tree had

  • returns of 150% to 300%;
  • $30 million in customer assets; 
  • $75 million in assets;
  • 7-12 forex traders; 
  • not lost any customer money since its inception;
  • annual returns of about 250%; and 
  • investedfor five-to-six years in FOREX with 100% annual returns, which prompted a customer retention rate of 90%.

The CFTC Complaint seeks restitution, rescission, disgorgement, civil monetary penalties, permanent trading andregistration bans, pre- and post-judgment interest, and such other statutory or equitable

NOTE: The details contained in the CFTC Complaint are merely allegations. The defendants are presumed to be innocent unless and until proven guilty in a court of law.