From all the information that has been made available, it appears that David Smith really did little or no forex trading in the years prior to 2006 and then in 2007 attempted to create the illusion that he was really a big time trader.
I am of the view that and the end of 2006 and into 2007, the cash laying around in Olint had started to deplete as some persons opted to get out after the fight with the FSC.
Having recognized that he would more than likely soon ran out of money DS decided to make some changes that would allow him to steal as much as possible as he in was in fact being robbed by his “partners”.
David Smith gathers his lawyers and began the process of separating his client’s money from them, and actually making the clients facilitate this process unknowingly.
Olint created a what was later called a “private club members agreement” which was a new membership document which each client was told to sign and return or risked being kicked out of the club.
This new document( as far as I am aware) had no protection which had be offered in the earlier membership agreement, as while in the former it was stated that 80% of your funds where secured, this new agreement had no such thing. (We will get back to this later).
In early 2006, David Smith partnered with the Martinez to form I- Trade FX, as this was now going to be the vehicle used to steal as much money as was possible from his remaining client. (He was added as co-owner in Sept 2006)
David Smith subsequently started wiring funds to “fund” this account and appeared to have been doing some trading, in order to give his clients the appearance that he was really a super forex trader.
The trades that were being done were not particularly successful, but this was only a part of the larger plan, as now he could tell is loyal clients that he had lost most of the money while trading, which in this field was not illegal. You see the new agreement that his clients signed, gave DS full control over the pool of funds available and there was no protection being offered to his clients (i.e. no 80% was sitting around safely in the bank.)
While David Smith was trading and racking up losses (deliberately so), he was being assisted by other in moving the funds that he had been transferring into his personal accounts all over the world.
The losses that were been incurred on his trading platform were actually payments being made to his partner i.e. the co-owner of I trade FX (Really clever don’t you think). The trading records would show actual losses, (as he really did not want the fraudulent activity to be as brazen as he writing a check to these guys), so how better to get it done, while making it appear to be a legitimate business(trading) activity.
The creation of TCIFX hedge fund was really smoke screen activity, once again to give the appearance that genuine trading activities were taken place, and where only done to increase cash flow to Olint thus allowing the process to continue for a while longer,which facilitated the concealment of stolen funds.
David Smith is very well aware how law enforcement officials works in the Caribbean and so with very limited resources on their hands, they cannot afford the time or money to track the loot that may have been spread to all corners of the world.
The account of activities mentioned above have not been verified by law enforcement, and is based on available records from the NFA, the FSC and personal views.