The Financial Fraudsters of Boca Raton

Here we go again, yet another financial fraudster operating out of Boca Raton, Florida.

What is going on with south Florida? It seems like every other day, we get yet another CFTC bust from a whack-a-doodle “trading expert” claiming to be a millionaire trader that wants to sell you his “secrets to wealth” through Forex and Options trading.

This latest rascal is a person named James Frederick Walsh aka Stormy Walsh, operating out of 6850 South Villa Drive, Boca Raton, Florida.

According to the CFTC, FTC, and the State of Texas

On May 24, 2021, the CFTC or Commodity Futures Trading Commission obtained a final judgment for fraud in the amount of $555,726 because Mr. Walsh fraudulently misrepresented his trading performance and attempted to collect “performance fees” from his victims.

The CFTC complaint and final judgment are bare in details. However, the complaint actually originated from the State of Texas Securities Board and the Federal Trade Commission.

As per the State of Texas, our latest Boca Raton fraudster claimed to be a “master trader” that routinely earned 6 or 7 figures from Forex and Options trading.

The routine of this fraudster is just what you would expect…Mr. Walsh advertised on his website, YouTube channel, and numerous advertisements on Craigslist that he wanted to be your personal investment mentor. You know, teach you the secrets of getting rich quickly by flipping Forex and Options contracts.

Just push a green or red button every minute for profit!

Mr. Walsh held himself out to the public as “hedge fund manager” according to his linked in profile. And that he had finally achieved financial freedom and was living the dream in Boca. His days were spent on the beach, sipping cocktails, flying on his private jet, and driving his Lambo.

Oh, and some other bullshit about dating women many years his junior. Have a look at this handsome rascal, is he going to need a few extra bucks to score the ladies? I think not.

Jim “Stormy” Walsh

How the scam played out

I love analyzing these sorts of investment education scams. Its fun to walk through the scam from point A to point Z, to discover how they lure the victim into the web, build trust, and then systematically fleece the victim of their assets.

According to the evidence collected through court documents and interviews with the victims (there were three willing to talk) the scam played out primarily over social media, namely YouTube.

The first step for the victims of this rascal usually started innocently through ads placed on Craigslist. In the ads, Mr. Walsh routinely claimed to earn 8% – 11% per month and he was able to achieve this success because he had obtained “legal, inside information” of how the “big banks” were going to trade.

With their interest piqued, the victim would then be directed to the YouTube channel where the victim would view a series of videos that proclaimed that the trading was “real” and “actual trades.” However, according to the victims, these recordings were always presented after the market closed, and the victims eventually came to the belief that Jimmy was simply trading on market replay.

What is market replay? For those not familiar, market replay allows a person to trade “live” on top of recorded market action. To the casual viewer, this appears to be real trading, but its not. Its just a recording of the trading action and Jimmy was simply executing trades — after the fact.

Once the victim was lured into the web of deceit, the victim was then encouraged to attend the live trading room where “Stormy” would execute “live” trades for the live audience. On some days, Jimmy would make money, on other days Jimmy would lose money. But that didnt really matter because on any series of days, Jimmy would sometimes get lucky and have an extended winning streak.

When Jimmy got the lucky streak going, and after properly grooming the victim, he would set the victim up for ultimate failure.

Ultimate failure played out two ways. The first was Jimmy selling “mentorship” and “training” and the so-called secret formula of how the banks would trade.

The other way “ultimate failure” played out was far more illegal, and devious. Let me explain…Jimmy would develop a deep trust with the victim, after he developed this deep trust, he would then attempt to gain access and control over the trading account of his victim.

The method was clever. What he would do, is he would tell the victim “you can copy my trades 100%,” but “you need to modify your trading account permission at the brokerage so that your trades automatically mirror my trades.”

The victim would naturally think to themselves, “Wow, Jimmy is a master trader and he does all the work.” And, “I don’t even need to be in the live trading room everyday because Jimmy is now managing my money.”

Of course, Jimmy also provided a written guarantee to his victims. The written guarantee included a minimum return on investment of at least 3% per month and a likely return of 8% – 11% per month. Additionally, Jimmy would be paid a performance commission of 40% of monthly profits.

Some victims waffled and waited because it “sounded too good to be true” and were told by family members that it sure sounded like a scam. But once the victim became enmeshed in the web of deceit, it was hard to escape. On a near-daily basis, Jimmy would send out emails claiming to have earned $46k on one ten-day period, and a $70k return on another four-day period.

However, there were never any mentions of losses. Everything was rainbows and unicorns. That is, until the regulators started a secret investigation.

The lion and the lamb

In late 2019, Jimmy hit the radar of the regulators. I don’t want to name the entity or person that dropped the dime on Jimmy, but you can use your imagination on who triggered the complaint.

The complaint was originally filed with the CFTC and the FTC…but they initially looked at this case and thought it “too small.” But somebody got pestering the big regulators to take action and they finally budged. The case was eventually referred to the State of Texas securities regulator.

The State of Texas took the recommended path to uncovering these sorts of fraud, which is one of my personal favorites…The Lion and the Lamb email.

The State of Texas initially sent out a letter identifying themselves and asked Jimmy to stop offering unregistered securities to the citizens of Texas. This is the Lion email. Jimmy replied, “No problem Mr. Texas regulator, I will stop.” But Jimmy did not stop. Little did poor Jimmy know that the state of Texas also sent out the Lamb email.

There is no better way to catch these trading crooks than to act like an innocent, know-nothing consumer with plenty of money to spend and lacking much intelligence. This is the Lamb email. And its the perfect bait.

Poor Jimmy took the bait and proceeded to email back and forth and back and forth and back and forth some of the most outrageous financial huff puff the world has ever seen. He made all manner of wild and outrageous promises of profitability — all recorded.

The Texas regulator was totally surprised and amazed at how well the Lamb email worked. The Texas regulator thought to himself, “This Jimmy is really stupid. I should call him.” And so, the Texas securities cop gets on the phone and acts like a na├»ve fool needing to be fleeced. Once again, Jimmy could not help himself and proceed to fuck himself further — all recorded.

Now remember, just a few weeks prior, Jimmy had promised that very same Texas regulator that he would stop scamming Texas consumers and would keep his scamming where scamming is an accepted practice…in Florida.

The Texas regulator was not happy with Jimmy. So he went to his boss and got permission to visit Jimmy at his fine Boca abode. He then purchased a plane ticket to visit the world epicenter of financial fraud — Boca Raton, Florida. He landed at the airport and weaved his way through the masses of other financial fraudsters that also live in Boca Raton, Florida and drove out to see Jimmy personally.

The Texas regulator rings the door bell. No answer. He rings again. No answer. He rings a third time, and then a squeaky voice seeps through the door…”What do you want?”

The Texas regulator shows his badge through the peephole and poor Jimmy immediately shit hit pants. He thought to himself, “What the fuck am I going to do now?” Reluctantly, Jimmy peels open the door only an inch and presses his lips into the crack. He then say’s “Sir, I told you that I would stay out of Texas.” The Texas regulator then slides the emergency cease and desist order through the crack in the door where it falls right onto Jimmy’s bare dirty feet.

The Texas regulator then states, “You are being charged with securities fraud in the state of Texas. Get out of our state. If you continue to scam Texas citizens, I will be back with handcuffs and you will be charged under Section 23-2 of the Texas Securities Act and you can be imprisoned for two to ten years.”

With a sigh of relief, and a turd still sitting in his underwear, he thought to himself…”I am not going to jail today?! That was a close call!” Jimmy then headed restroom to clean himself up.

The Texas regulator then headed back to the airport and forwarded everything to the CFTC investigator.

Once the Texas regulator did all the hard work…tracking down and serving Jimmy with documents, the CFTC then proceeded with the nationwide enforcement action. The rest is history.

Wrapping things up

A big thanks to the Texas regulator for taking action. Usually, the State regulators stay out of these sorts of investment scams. But lately, they are taking more action and being more aggressive. Its good to see.

Also, a big thanks to the victims that were willing to speak out. One guy lost his life savings. He wont get his money back. He is embarrassed. But having this article published about his tormentor might take a little sting off the wound.

And most importantly a big thanks to a certain trading educator that wished to remain anonymous. This trading educator was the person that introduced Jimmy to the trading scene several years ago. He watched how Jimmy came to trading from knowing absolutely nothing about trading. And he also witnessed how Jimmy transformed into an online investment educational fraudster, all to his disappointment.

This trading educator also detailed how when he first met Jimmy, he was flat broke and needed to borrow money to supposedly pay medical bills.

Once again, thanks for reading.

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dave
dave (@guest_6062620)
24 days ago

How many people u know in boca raton?
Where are u from?

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