SAN DIEGO–An Oregon man was sentenced Wednesday by a judge for fraudulently soliciting more than $10 million from members of the public.
United States District Court Judge Thomas J. Whelan sentenced Mark Todd Hauze to serve 108 months in federal prison and three years of supervised release. A federal jury found Hauze guilty on January 26, 2010 of mail and wire fraud and false statement on tax return.
According to the evidence presented at trial, from 2002 to 2005, Hauze used sales agents, a website, and other means to fraudulently solicit more than $10 million from members of the public, supposedly for participation in foreign currency trades. The evidence showed that Hauze convinced people to invest their retirement accounts and other funds in Universal Money Traders (UMT) by falsely representing, among other things, that UMT’s foreign currency trading had generated annual returns of 30 percent or more, that UMT used a guaranteed “stop-loss” system that limited a client’s potential losses, and that clients would be able to check their account balances and trading results on readily-accessible, accurate, online account statements.
The evidence established that Hauze intentionally concealed from UMT’s clients that UMT did not actually use a guaranteed stop-loss, and that UMT regularly reported bogus trading results and false account balances to the clients. The false trading reports lead UMT clients to believe that their account balances were growing, when, in fact, Hauze had lost substantial amounts of the clients’ funds through trading, commission charges, and other means. The evidence also showed that Hauze used a substantial portion of the clients’ funds for his own personal gain, including for luxury vehicles and sports gambling, and that he used new money received from UMT clients to fulfill withdrawal requests made by other clients. Around March 2005, UMT failed to honor withdrawal requests made by their clients, which Hauze falsely claimed to be due to the client accounts being temporarily frozen for an audit. Hauze also attempted to hide nearly $900,000 of income from the Internal Revenue Service.
United States Attorney Hewitt stated, “Defendant Hauze acquired precious trust from victim investors that he then abused for his own personal financial gain. From the criminal justice system he has now received a measure of justice that he has well earned.”
FBI Special Agent in Charge Keith Slotter commented, “Today’s sentencing reinforces that the FBI and our law enforcement partners will continue to identify those who, out of personal greed, bilk their fellow Americans out of their hard earned money, savings, and retirement. It should stand as a warning to the public to be extremely cautious of anyone who promises or guarantees any large rate of return.”
“Today’s sentence sends a signal to those would-be investment fraudsters that they are not above the law. It also sends a message to the public to be wary of “get rich quick” schemes that will inevitably deplete their life savings,” said Leslie P. DeMarco, IRS Special Agent in Charge of the Los Angeles Field Office. “IRS Criminal Investigation, along with our fellow law enforcement partners, will continue to identify and investigate those individuals who take advantage of the financial well being of others for their own personal financial benefit.”