Former Peachtree City resident Elton A. (E.A.) Gresham has been indicted by a federal grand jury alleging that he defrauded investors of $15.8 million. The Sept. 21 indictment filed in federal court in Dallas said Gresham’s Ponzi scheme has resulted in 10 counts of aiding and abetting mail fraud relating to a foreign currency exchange trading (ForEx) program. Gresham on Friday told The Citizen that more than $14 million has gone back to investors, adding that he plans to make full restitution to the others.
Pertaining to the grand jury indictment, U.S. attorney James Jacks said the indictment alleges that from January 2004 through June 2009, Gresham recruited at least 90 individuals in Texas, Georgia, Kentucky, Tennessee, Florida and other states to invest in his ForEx trading business, The Gresham Company. Jacks said Gresham falsely represented to potential investors that he generated consistent returns on investments of up to 10 percent per month. In fact, Gresham was actually losing money on his ForEx trading, Jacks said.
Jacks said Gresham also concealed from investors that he used their investment funds for personal reasons or as payments to earlier investors, a scheme often called a Ponzi Scheme.
“Over the life of the scheme, Gresham obtained nearly $15.8 million from unsuspecting victims and would send monthly emails to investors containing false investment return information,” the indictment said.
In a related matter, a civil action was filed in July 2009 by the U.S. Commodity Futures Trading Commission (CFTC), alleging that Gresham had operated a ForEx Ponzi scheme, having solicited at least $15 million from more than 75 people.
To date there is no outcome relating to those charges. A CFTC spokesperson Thursday said the civil action is still being litigated.
“Of the $14 million (that has been repaid to investors), that’s the other side of the story from what the federal investigators are saying. Eventually, the other side will come out. And with the $14 million, that needs to be balanced because some investors got more than they put in, some got less and some got about what they put in,” Gresham said Friday.
Jacks on Sept. 21 said it was anticipated that Gresham would surrender himself before a federal magistrate in Atlanta. At that time, Gresham will make his initial appearance on the new indictment, Jacks said. Speaking Friday, Gresham said he turned himself in to federal authorities in Atlanta on Sept. 23 and was issued a personal recognizance bond the same day.
If convicted, the maximum statutory sentence for each mail fraud per count is 20 years in prison and a $250,000 fine, Jacks said. Gresham also stands to lose a home in the Fisher’s Bank subdivision in Peachtree City and another in the Cathy Estates subdivision in Tyrone.
A former resident of Olney, Texas, the indictment said Gresham operated his business out of Peachtree City. He utilized contacts from the Texas area and beyond to locate investors, the indictment said, adding that he also targeted members of the Christian faith, who were elderly and particularly vulnerable to Gresham’s inducements. Gresham often told potential investors that he believed his success in ForEx trading was a blessing and gift from God, and Gresham considered his investment business to be “his ministry.”
Gresham also encouraged people to invest by telling them that investors could use their investment gains to “further God’s work.”
The indictment lists 10 counts representing 10 investors from Texas, Florida, Tennessee and Georgia. Their investments ranged from $10,000 to $100,000. None of those listed were from Fayette or Coweta counties.
Gresham said he will be challenging the evidence in both the criminal and civil cases based on the way the evidence against him was collected. Gresham said that evidence, collected at his home and office, was collected without a search warrant.
“I’m not trying to evade restitution, I’ve told the judge several times about the evidence issue. I want to pay the investors back if it takes the rest of my life,” Gresham said.
Having contacted The Citizen to go on the record, Gresham on Friday noted another facet to the circumstances surrounding the charges against him. Gresham said an examination in fall 2009 by a forensic psychiatrist determined that he had been suffering from a type of mental illness called “Delusional Disorder, Grandiose Type,” adding that it is one of the six types of mental illness accepted in trial law. The psychiatric report noted that Gresham had suffered from the illness since at least 2002. Gresham said the delusion was broken when a family with “a lot invested wanted their money back.”
Gresham said he had been subject to the delusions for several years and had had issues with mental illness since age 10.
In the lengthy report, the psychiatrist said Gresham’s, “… delusion was not a product of a severe mood disorder, despite his mood being ‘upbeat’ and ’positive’ from 2003 to 2009…
This change in his mood, which stood in stark contrast to his prior episodes of severe depression, was simply an understandable and normal mood response to his false, fixed belief that he was special and had found his calling from God.”
“So what was my motive? It obviously wasn’t money since I had (verified) assets (in 2009) of $22,000 at age 64,” Gresham said. “There’s no way I could have done this, with a sound mind, to these people, many of which I’ve known and loved for years.”
The U.S. Commodity Futures Trading Commission (CFTC) in July 2009 charged Gresham, doing business as the Gresham Company, with operating a multi-million dollar foreign currency (ForEx) Ponzi scheme and specifically targeting persons of the Christian faith to invest in the scheme. Federal court documents said Gresham solicited at least $15 million from more than 75 people.
CFTC was seeking a variety of civil penalties and remedies in U.S. District Court for the Northern District of Georgia in Newnan. The CFTC complaint, filed July 2 alleges that Gresham’s “massive Ponzi scheme” began in January 2004, and continued up until 2009.
CFTC investigators said Gresham’s “gimmick” was “trading off-exchange foreign currency contracts (ForEx).” Gresham allegedly claimed to prospective customers that he was successful trading ForEx because the “Lord had blessed him,” investigators said.
Relating to the circumstances of both the indictment and the civil charges, Gresham said there were approximately 90 investors of whom about half approached him.
“I didn’t target Christians or seniors,” Gresham said. “The investments were intended to help Christians grow an income for their personal benefit and to contribute to the ministries of their choice. The people in the program will verify that.”
Gresham said his first year of trading came in 2003, during which he had one client. Another man asked to be included that year but Gresham said he turned the man down.
Countering some of the claims made by federal investigators, Gresham said he did have successful months of trading.
“In the last two months of trading (May and June of 2009) I made 260 trades and 228 of those were successful,” he said. “That’s 88 percent.”
Gresham said he worked under the ForEx Capital Markets (FXCM) firm, adding that the broker had other traders in the program who were making 10 percent or more per month.