The Peachtree City man who was charged with bilking investors out of $15.9 million didn’t deny what he did, saying he was insane at the time of the incidents.
Eldon A. Gresham, Jr., 67, of Peachtree City, is now facing federal prison time after having pled guilty in a Dallas federal courtroom to a single count of mail fraud that cost investors millions. According to court documents, the U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court summary judgment order resolving its claims against Gresham, doing business as The Gresham Company (Gresham) of Peachtree City, and relief defendants Werner H. Beiersdoerfer (Beiersdoefer) and his company, Interveston Wines, LLC (Interveston), both of Calera, AL.
The claims arose from a CFTC complaint filed July 2, 2009, in the U.S. District Court for the Northern District of Georgia that charged Gresham with operating a multi-million dollar exchange foreign currency (forex) Ponzi scheme. Beiersdoerfer and Interveston were named in the lawsuit as relief defendants because they allegedly received funds as a result of Gresham’s conduct to which they had no legitimate entitlement.
The summary judgment order entered against Gresham on September 9, 2011, found that, from 2004 to 2009, Gresham fraudulently solicited $15,900,245.97 from over 100 customers for the purported purpose of trading forex.
According to the order, Gresham lured customers and prospective customers with promises of extraordinary monthly returns perpetuated his scheme by falsely reporting substantial gains to customers. The court further found that Gresham engaged in only limited, unsuccessful forex trading and that Gresham misappropriated the vast majority of customer funds to pay “returns” to other customers and for personal use.
Gresham, according to the complaint, solicited some customers to invest supposedly by opening and funding an account for them based on their friendship over the years. After receiving a string of emailed statements showing purported extraordinary monthly returns many customers began to contribute their personal funds into accounts with Gresham.
Gresham allegedly persuaded some customers to temporarily withdraw their retirement funds by telling them that he could earn five to 10 percent a month on these funds. He claimed that by doing so, customers could attain profits in less than 60 days. According to Gresham this would enable them to transfer the principal -- and expected large profits -- back into the retirement accounts before an early withdrawal tax penalty would be assessed. Additionally, Gresham told customers their risk was limited because he was a conservative trader; he told a least one client her investment with Gresham was insured by the federal government and the biggest forex exchange in the United States, according to the formal complaint.
Gresham admits he got in over his head and started to believe his own hype, which ultimately led to his lying about the investment returns, he said.
In an exclusive interview with Fayette Newspapers, Gresham said that “we did okay the first year and I was gaining confidence.” Gresham said he started believing, and telling people, this was his ‘spiritual mission’ –his “ministry of money” and it was a 50-50 split with his clients.
It was then that he started misrepresenting the returns on the investments. And, he said, as long as no one took out too much money or looked too closely, he had no problems.
“It was when people started wanting to take large sums of money out that it became a problem,” said the former Olney, Texas resident.
So, when that happened, he pulled funds from one account to another to make the payments. He said finally it became apparent there was something wrong with his business practices and three of his clients confronted him in his office. He admitted he’d been inflating figures.
“I didn’t lie to them about it. I didn’t even try to stall them,” he said. Gresham said it was like coming out of a trance. The bubble had burst and he suddenly could see clearly what he had been doing. “I told them I deserved to be shot for what I’d done.”
After that, Gresham said he voluntarily surrendered himself to the Peachtree City Police Department since he figured he’d be arrested at any time. He was told, then, that they didn’t have jurisdiction because it would be considered a federal offense.
That same night, he said, he voluntarily admitted himself to Anchor Hospital for evaluation. He was treated for depression, then released six days later.
He said he felt ‘pruned to the ground.’
His diagnosis, he said, was that he suffered from grandiose delusions to the point of insanity and was told that he didn’t know the difference between right and wrong at the time he was lying about the return on investments.
He’s been through three judges he said, each contradicting the ruling of the other, since he tried to introduce the evidence of his expert witness on his mental stability.
The federal civil case against Gresham ended on May 7 with Newnan U.S. District Judge Thomas W. Thrash, Jr., ordering a civil monetary penalty of $8.1 million against Gresham. Thrash also ruled that an Alabama defendant and his company must disgorge $5.2 million to Gresham’s customers “because they allegedly received funds as a result of Gresham’s conduct to which they had no legitimate entitlement.” In addition, the order permanently bars Gresham from engaging in any commodity-related activity, including trading, and from registering with the CFTC in any capacity.
On May 9, the court amended the earlier order to require Gresham to pay $2.7 million in disgorgement to his defrauded customers.
Now, the U.S. Attorney’s Office in Dallas said that Gresham, representing himself, pled guilty in a federal court at the end of last week. A sentencing date has not been set yet
Now his fate’s in the hands of U.S. District Judge Jorge A. Solis. A sentencing date has not been set but Gresham could have been facing a maximum penalty of 20 years in prison, a $250,000 fine, as well as restitution to his victims. However, the terms of the plea agreement would hand him a sentence at the lower range of the prison term possibilities and a forfeiture of $15.8 million.