January 15, 2008 / 8:39 PM / 10 years ago

N.Y. man arrested in foreign exchange scam

3 Min Read

NEW YORK (Reuters) - A New York man who was sentenced some five years ago for his role in a securities fraud scheme was arrested on Tuesday for allegedly defrauding investors of millions of dollars in a foreign exchange scam.

Michael MacCaull, 36, a principal at Razor FX, defrauded hundreds of investors beginning in 2000, telling them he was investing their money in the foreign exchange market when he and his partner were simply putting it in a bank and using it to pay their living expenses, prosecutors said.

MacCaull lived in a luxurious Northport, New York, apartment, and drove an Aston Martin car paid for out of investor funds, U.S. attorney's office in Brooklyn said.

In the scheme, money put in by new investors was used to pay those who withdrew funds, according to a document prepared by a U.S. postal inspector in support of the application for an arrest warrant.

To conceal the scheme, they sent investors false account statements reporting nonexistent trades and profits, prosecutors said.

Razor FX had investors in the United States as well as internationally in Canada, Hong Kong and the United Kingdom. About $68 million was deposited in one of the firm's bank accounts since it was opened in February 2007, according to the document.

Razor FX maintained offices at various times in Great Neck, New York, and Upper Saddle River, New Jersey, and has a Web site at www.razorfx.net.

Bradley Eisner, listed as president on the company's Web site, did not immediately answer a call for comment.

MacCaull was previously sentenced on October 28, 2002, to 15 months in prison and a three-year term of supervised release for his involvement in a scheme at defunct broker-dealer Sterling Foster & Co, according to the document.

In that scheme cold callers and aggressive brokers sold investors "house stocks," initial public offerings of stocks they underwrote, according to the document.

MacCaull subsequently pleaded guilty to violating the terms of his supervised release and was sentenced last year to one day imprisonment and an additional term of supervised release of 18 months, according to the document.

MacCaull was arrested on Tuesday morning by U.S. postal inspectors, who along with the U.S. attorney's office in Brooklyn investigated the case. He faces mail fraud and wire fraud conspiracy charges and a maximum of 20 years in prison, prosecutors said.

The government has also filed seizure warrants for two automobiles which MacCaull bought for more than $245,000, prosecutors said.

His lawyer was not immediately available for comment.

Reporting by Paritosh Bansal; Editing by Brian Moss

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below