An investment
adviser from the U.S. who promised returns as high as 4,000% per year
through fraudulent trading schemes has been hit with
default judgments totaling over $160,000 after failing to respond to
federal fraud charges, the Securities and Exchange Commission (SEC) informed.
Robert
Thompson and his company The Financial Freedom Foundation,
operating as F3 Mastermind, promoted what they called risk-free
investments that would generate returns ranging from 20% per week to
an astronomical 4,000% annually.
A federal
judge in Missouri’s Western District ordered the defendants to pay almost $73
in disgorgement plus $18,000 in prejudgment interest, along with $36,000 civil
penalties each.
Missouri Adviser Promised
4,000% Returns in Massive Fraud Scheme
The
jaw-dropping 4,000% return promise – which would turn $10,000 into $410,000 in
just one year – was central to Thompson’s pitch to investors
seeking passive income. Between 2019 and 2022, Thompson operated F3
Mastermind as a membership group where investors paid initial and
monthly fees, then received recommendations for investments in
programs claiming these impossible returns.
“Thompson
told the member that the investment was a compound trading program that would
generate returns of 20% per month, compounded every month for 36 months. Thus,
according to Thompson, the investment would generate returns of at least 600%
over a 36-month period,” SEC commented in the official statement.
But his
marketing materials went even further, touting opportunities that
could deliver the staggering 4,000% annual returns.
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Prime Bank Schemes Target
Victims
The schemes
bore hallmarks of prime bank fraud – a type of scam that typically
promises extraordinary returns from trading in fictitious
financial instruments. F3 Mastermind members collectively invested
at least $2 million in these programs after receiving Thompson’s
recommendations.
Thompson
built credibility by presenting himself as a graduate of an elite
business school and member of Mensa. He used promotional videos
posted on YouTube and public portions of F3 Mastermind’s website to tout
his supposed expertise and years of experience as a
professional investor.
One F3
Mastermind member invested $300,000 in what Thompson called the
“First Prime Bank Scheme” based on his recommendation. Thompson
had told this investor the opportunity represented good “Level
1” investing and that he had extensive experience with
similar investments.
Related: How One Trader’s Spoofing Scheme Cost Him $357K in Penalties
Pattern of Failed Promises
When early
investments failed to deliver the promised returns, Thompson
simply recommended new schemes. After one member’s $300,000 investment
proved unsuccessful in 2020, Thompson pitched additional investments in
what the SEC labeled the “Second Prime Bank Scheme” and
later the “Third Prime Bank Scheme.”
Thompson
continued promoting these opportunities even as previous investments
collapsed. By 2021, F3 Mastermind’s website still advertised that with a
gold level membership, members could access “Level 1 Managed
Buy/Sell Programs that pay 10% per month or more.”
Relief Defendant Also
Ordered to Pay
The court
also entered a default judgment against Brandon Stucki, designated as a
relief defendant who received almost $10,000 in ill-gotten gains plus
$2,689 in prejudgment interest. Relief defendants typically receive
funds from fraudulent schemes but aren’t accused of
participating in the underlying misconduct.
Thompson
and F3 Mastermind never filed responses to either the
original complaint filed in May 2024 or an amended version filed in
November. Their failure to engage with the legal proceedings led to
the default judgments entered August 14.
The
defendants are now permanently barred from violating federal securities laws,
including anti-fraud provisions of the Securities Act, Securities Exchange
Act, and Investment Advisers Act.
This article was written by Damian Chmiel at www.financemagnates.com.
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