Caribbean Ponzi schemer pleads guilty in U.S. court

Reuters News
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Posted: Mar 29, 2011 3:22 PM
Caribbean Ponzi schemer pleads guilty in U.S. court

MIAMI (Reuters) - A Jamaican financier who ran a Ponzi scheme that defrauded thousands of investors in Florida and the Caribbean out of more than $220 million pleaded guilty on Tuesday to fraud and money laundering charges in a U.S. court.

David Smith was extradited last year from the Turks and Caicos Islands after being sentenced to six-and-a-half years in prison on similar charges.

The case marked the latest Ponzi scheme to affect investors in Florida already hit by fallout from the massive fraud scandals surrounding convicted Wall Street swindler Bernard Madoff and accused Texas con man and financier Allen Stanford.

Prosecutors say Smith, a prominent philanthropist, headed an investment scam which lured some 6,000 people whose money was eventually used to bankroll his lavish lifestyle that included a $2 million island home, a downpayment on a Lear jet and expensive cars and jewelry.

He admitted in a plea agreement, filed in federal court in Orlando, Florida, to running a scheme that promised investors his foreign currency trading investments would yield monthly average returns of 10 percent. Smith agreed to forfeit $128 million immediately as part of the plea deal, which also stipulates that his wife will not be charged in the case.

Smith set up an investment house more than five years ago in Jamaica called Olint, offering to pool investors' money. It was eventually shut down before he relocated to the Turks and Caicos.

He is also linked to a Florida currency trading company.

Many prominent Jamaicans were allegedly among his victims, including leading politicians and doctors.

Smith pleaded guilty to four counts of wire fraud and 18 counts of money laundering, with each count carrying a maximum penalty of 20 years in jail.

(Writing by Kevin Gray; Editing by Tom Brown and Matthew Lewis)