Joel Nathan Ward, 49, of Modesto sat down with The Bee recently, saying he wants the community to hear the whole story behind a $10 million investment fraud scheme, not just the allegations prosecutors have made. He has pleaded guilty to nine felony charges and is scheduled to be sentenced Friday in U.S. District Court in Sacramento.
Q: Please tell us a little bit about yourself.
A: I was born and raised in Modesto, graduated from Beyer High School and attended Modesto Junior College. I worked in construction with my father, doing jobs in the foothills, and moved to Pine Mountain Lake. My first wife died after the birth of my eldest daughter. I married again and had two more daughters. We moved to Turlock so the girls could be part of a larger community. My second wife divorced me after I confessed to misappropriating investors' money.
Q: How did you learn about foreign currency trading?
A: After we moved to Turlock, I became an estate planner in the 1990s and helped companies raise capital. I took a foreign currency trading class at Learn: Forex Inc. in Sacramento and was hooked. Currency trading is easier than day trading and I was making 15 to 20 percent monthly returns.
Q: Why did you launch the Joel Nathan Forex Fund?
A: I was a good trader, so friends and family wanted me to make money for them. We started the fund in March 2003. Currency trading is an unregulated market, and the fund was not open to the public, so all I had to do was disclose the risks of trading in my prospectus.
Q: Prosecutors allege that your fund was a Ponzi scheme from the start, and you admit to sending falsified monthly statements to investors. Was the fund ever successful?
A: The fund was legitimate in 2003, with a couple hundred thousand dollars. I started dipping into the fund in 2004, because I had a big ego and didn't want to tell investors about losses. I found that I could cover the losses and that only emboldened me. I bought Learn: Forex Inc. in February 2005 and things got out of control. The school wasn't doing as well as the former owner indicated. It was like a monster that needed to be fed. I borrowed from the fund to prop up the school. If this had been a scheme from the start, I would be on an island somewhere, with money in offshore accounts. The FBI looked, and they couldn't find any money. We lived in a middle-class home on Sycamore Street in Turlock. I just went too far too fast.
Q: You diverted investors' funds into a development project in Mississippi. What was that about?
A: That was a Katrina relief program, but it's mired in some controversy, so I don't want to discuss the details. It was a legitimate land deal, but there were some improprieties by the developer. After the hurricane, people needed homes, so I thought it was a good investment.
Q: What tipped off the authorities?
A: The indictment says Washington Mutual Bank reported irregularities in my accounts in August 2006, but I don't think anyone was interested until months later, after I gave my ex-wife a written confession. I had just finished teaching a class called "Mind Over Money" and I felt like such a fake. I was suicidal and realized I had to come clean. I spent three days writing and my ex-wife gave my journal to my former business partner, who handed it out to our employees and turned it over to the authorities. I began writing letters to the investors the next day, promising to make good on my debts.
Q: Why did it all fall apart?
A: I thought I could cover the losses, and would have covered the losses, if my former partner hadn't jumped the gun. We had just filmed a DVD at a professional studio in Southern California and planned to sell our classes on an international scale. The school was finally in the black, for the first time. An investment group from Chicago was going to help me take the school, and a new fund, public. My cut of a $50 million initial public offering would have been $10 million, enough to cover the losses in the private fund. It's true that one woman from Utah invested $1 million in the school a month before the school folded, but even then, I still thought we would straighten things out.
Q: Tell us about your restitution plan.
A: Several friends who know my trading ability are willing to put up seed money so I can trade, and my commissions would go into a recovery fund. My former father-in-law and business partner, Oren Collett, would manage the fund and several victims have volunteered to sit on a board of trustees and act as auditors. I would have no direct access to the money.
Q: What makes you think you could turn a profit this time?
A: I could run with the best of them; that's not what went wrong here. I just like to push the envelope. I didn't have the level of respect for money that I needed to have. I should have put people in place to be my checks and balances. It's too easy to steal.
Q: What have you been up to lately?
A: I've been working on the recovery plan and another plan to launch a Web site aimed at cracking down on fraud in the art industry, which could be worth millions. I enrolled in law school, in a distance learning program offered through Northumbria University in England, but will have to put that on hold if I go to prison, because inmates can't go online. I am a pilot, so I could always work as a flight instructor. I will keep trading. The court can't stop me from trading.