Monday, December 01, 2008

Foreign currency speculator also ordered to pay $11.3M in restitution to customers

By SUSAN HERENDEEN
sherendeen@modbee.com

last updated: April 26, 2008 03:18:39 AM

SACRAMENTO -- A federal judge sentenced Turlock's "financial serial killer" to nine years in prison Friday, rejecting the former day trader's request for home detention so he could try to pay $11 million in restitution by speculating in the foreign currency market.

U.S. District Court Judge Garland E. Burrell Jr. sided with prosecutors who said Joel Nathan Ward, 50, never was a successful trader despite a massive marketing pitch in which Ward called himself a financial guru who could make millions by betting on the fluctuating value of the world's currencies.

In handing down his ruling, the judge said prison was required, because Ward stole from nearly 100 investors. He also said a term on the lower end of sentencing guidelines is appropriate, because Ward, who faced more than 11 years behind bars, had never been in trouble with the law.

Ward got another break when the judge agreed to recommend incarceration at a minimum security prison camp in Atwater, but Burrell would not let Ward surrender at a later date, for fear that the father of three might flee the country.

Within minutes, U.S. marshals led Ward from the courtroom as family and friends choked back tears.

Before he was sentenced, Ward addressed the court, saying he understood the gravity of his transgressions. He insisted his restitution plan was not a ploy to stay out of prison, as some critics contended. He said he used investors' money to support several businesses and a middle-class lifestyle.

"I assure you that it's not hidden somewhere," Ward said.

According to prosecutors from the U.S. attorney's office, Ward took $15 million from investors during the 3½ years he ran the Joel Nathan Forex Fund, but traded only $2 million, losing most of it.

The authorities said Ward siphoned off money to prop up a now-defunct Sacramento-based school called Learn: Forex Inc., which taught people how to trade foreign currencies in a market that is largely unregulated and known for scams.

Ward sponsored trade shows to lure investors and students, published online columns touting his trading skills and produced infomercials that aired on cable television.

The FBI arrested Ward in April 2007, five months after he made headlines in The Bee for telling investors their money was gone. That revelation came days after Ward penned a confessional diary in which he likened himself to a financial serial killer.

Ward's wife, who divorced him after his misappropriation came to light, shared the diary with a former business partner who went to the police. Ward pleaded guilty to nine felonies in August: five counts of wire fraud, two counts of mail fraud and two counts of money laundering.

He said he turned down a plea deal because a prison sentence would make it impossible to pay restitution.

According to court records, investors paid at least $50,000 to join the fund Ward ran out of an office on West Monte Vista Avenue in Turlock. Ward -- a Beyer High School graduate who worked in construction, then estate planning -- has no formal financial training. Ward was living in Modesto while awaiting sentencing.

Family, friends rallied behind restitution plan

Many of the friends and family he stole from supported Ward's restitution plan. The plan called for an account that would be started with $100,000 in seed money from friends. Ward would have traded the money but would not have had access to the funds.

In legal papers, Assistant Federal Defender Jeffrey Staniels said 44 of 79 victims who shared thoughts with a probation officer supported the repayment plan, thinking it was their best chance of getting back some of their retirement or college funds.

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