May 25, 2004 – LAWFUEL – The former owner of a Beverly Hills inves…

May 25, 2004 – LAWFUEL – The former owner of a Beverly Hills investment firm has been sentenced to 46 months in federal prison for his role in a scheme that bilked investors out of more than $2 million dollars through a foreign currency options trading scam.

Eric Weichselbaum, 34, of Studio City, was sentenced yesterday by United States District Judge Percy Anderson. In addition to the prison term, Judge Anderson ordered Weichselbaum to pay $2.4 million in restitution to victims. Weichselbaum pleaded guilty in January 2003 to three counts of mail fraud.

A second man involved in the scheme, Frank Southerland, 64, of Florida, was sentenced in January to 63 months in prison. In September 2003, Southerland was found guilty by a federal jury of 10 counts of mail fraud and four counts of wire fraud.

Weichselbaum operated a Beverly Hills investment firm originally known as Secured Currency Investments, Inc., and later known as Swiss Forex Group, Ltd. Weichselbaum set up Secured Currency Investments in April 1998, and he hired various employees to persuade investors living in various states to open trading accounts with the firm. The firm advertised itself as a foreign currency options trading house, with affiliated overseas clearing firms in the Bahamas and Switzerland.

Southerland joined Swiss Forex in 1998 and managed the fraudulent firm on a daily basis with Weichselbaum. Southerland handled customer complaints and was also responsible for getting victims to reinvest funds and send additional funds to Swiss Forex.

Investors who opened trading accounts with the firm were told that their money would be used for overseas investments in the international foreign currency options market. The vast majority of investor monies were never transmitted overseas or used for the purported investments claimed; rather, they were misappropriated by Weichselbaum and Southerland, who used the investor funds to pay expenses related to the fraud and to pay themselves. Investors who complained to the company frequently did not receive their investments back, and many investors received false information in the form of fictitious account statements. Some investors who demanded the return of their investments received funds that other investors had given to the firm. Investors sent the firm more than $2 million during the life of the scheme.

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