How did Olint steal your money, and how David Smith planned to get away with it.

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.

Notes:

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.

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15 Responses

  1. I find it very interesting to read all the blogs and information flying around the internet regarding Olint, David Smith, I-Trade FX and all the other players in this game. I also read with some distress of the cases of many people who have invested their life’s savings, or who have been not so wise as to leverage their possessions to access funding to invest in these instruments.

    What I am finding pretty disturbing, is that most of the comments being made, and information being banded about, gives the impression that DS is this mastermind of a criminal, who sat down, orchestrated and executed one of the largest scams in the Caribbean region. That may or may not be so, and as far as I am concerned it is mostly conjecture, as none of us knows exactly what DS may have conceived, orchestrated or implemented. We may have pieces of a puzzle that in of themselves may give a false picture. All we know is that a series of events led to this current situation and could have resulted from poor judgment, foolish decisions, or the panic action in an attempt to correct an already bad situation.

    Anyone who trades any kind of financial instrument, knows full well the panic that can overtake a trader who has made significant losses, which, in an attempt to recover such losses, could (and usually does) result in more and greater losses.

    It is also a truism that the amassing of money, and the desire to make more money (especially when it is “easy money”) is an intoxicating condition. Any mortal person can be easily overtaken by this condition, especially if there are no safeguards, checks and balances are in to keep sanity and level-headedness in control, front and centre. Hence the reason for having internal and external auditors, and the implementation of policies and procedures to govern, provide oversight and to manage the risk of folks “losing their heads” once money is being earned.

    In all that has happened, we need to put things into perspective. We need to lay blame for the current situation, not only at the feet of DS and his Olint operations, but also at the feet of every person who invested in the scheme. As the Bible intimates, no one sin is greater than the other sin. Sin is sin however you slice it, dice it, or mix it. If investors were not motivated by the intoxicating feeling of earning way above average returns of more than 10% per month, then DS or any other sub-account manager could not have taken the funds out of their bank accounts. Indeed, there are many folks who have stayed away from these investments, either because of fear or losing what they already have, or don’t have, or just a plain aversion to high risk investments.

    My concern about FX trading has always been the fit and proper status of the operators … not just the chief operator, but all the operators that surround him. The instrument of FX currency trading is legitimate and has the potential for generating significant earnings. The challenge is to not lose your way and get giddy with the gains being made, but to ensure that policies and procedures are in place to control these human failings, especially when you have a fiduciary responsibility for the management of the funds of investors.

    I believe that DS started out with the best of intentions, and may have lost his way somewhere along the intoxicating road to success. It was obvious from communications coming out of Olint over the years, that effort was being made to plug holes of deficiency, inefficiency, potential fraud in the system as the popped up. One could argue that this was a smoke screen and part of the master plan to mislead and misdirect. And this may or may not be so. Once again, this is just conjecture.

    We all face those challenges each day as we strive to make our businesses generate more revenue and hence a larger bottom-line. Many have evaded taxes, lied on customs declaration forms, skimmed prices and made other unethical decisions in order to generate more revenue and greater profits.

    At the end of the day three things remain true: –

    1. Foreign Exchange trading is a legitimate business activity that provides investors with the potential to make supernormal profits … and also provides the opportunity for you to “lose your shirt”
    2. DS failed in managing his business operations in a way that would safeguard the interest of his clients and to ensure that their funds were safe and prudently managed.
    3. Investors made the decision to put their funds into this business and were not coerced or forced to do so. Whether they did so based on unwise counsel from folks who were not fully informed, or they did so purely out of the greed that can so easily overtake our frail human psyche, they did it, and hence have to also be held accountable.

    What lessons can we learn from these situations?

    1. The Good Book says in Gen 3:19 that “in the sweat of thy face shalt thou eat bread, till thou return unto the ground”. There is no way around it, we have to work for our living. Some will just have to work harder than others, but work we must.
    2. There are sometimes opportunities to earn significant income/profit without much effort on your part, but these opportunities are usually very few, and very far between. When such opportunities arise, be wise in your pursuit of them. Do your homework, and recognize that they are rare and may not last for long.
    3. Develop an investment strategy that meets your particular risk and reward profile. More important than developing the strategy is to stick to that strategy and not let emotions detract you. Money can have an intoxicating effect on us, and when we see it growing at a fast pace, we lose our ability to think rationally.
    4. High Return ALWAYS equals HIGH RISK. There is no two ways around that, and there is no other way to rewrite that economic principle.
    5. Never invest in High Risk instruments more money than you are willing to lose. Consider it money thrown into the river. It is gone from you. If after many days it comes back to you fourfold … GREAT; if it continues to be washed down to be lost in the big ocean, you would have already counted it as lost.
    6. Never borrow money to invest in high risk instruments, unless you have the ability to fully repay that debt from income sources other than the returns that will generated from the investment.

    Well, those are my “few” words, in Jesus’ name

  2. @Bingy Bert
    Your points taken especially those on
    1. Think and check before you invest
    2. High Return equal High Risk ( sometimes suggest scam)
    3. Greed
    4. Avoid the intoxication of high returns
    5. Fit and Proper…

    On the other hand, can you ask David to show us the trading records, the real ones?

    The hard facts:
    1. The NFA report suggest nothing (no trading of significance) was going on at I-Trade FX. (Read the reports) mmh
    2. Refusal to give the NFA his banking records…(removed as a director of I Trade) mmh
    (Add to that, his partners at I-trade FX failed to file SAR on DS’s, IL’s and GH’s million dollar transactions while filing SARs on others with thousand dollar transaction)…
    3. The refusal to open the books in 2006 and be regulated in Jamaica. (FSC) mmh
    4. Refusal to submit audited financials to the Banks (or would the secret come out). mmh
    5. Broken Promises since Jan. 2008 mmh

    Quoting scripture… by their fruits you shall know them Matthew 7:16….

    BTW do you know what happen with while he was at JMMB? What was his job there again?

    Interestingly this Blog was one for the first places to suggest … Forex to Ponzi.. https://investforlife.wordpress.com/2008/05/27/a-forex-club-to-a-ponzi/ by sharing an example.. Did DS little FX trading lead to the biggest PONZI the caribbean has seen?

    In the absence of information, people will speculate.

    • I have no issue with the fact that wrong may or may not have been done by DS. I have no issue with the fact that much has been lost by many. I have no issue with DS being made to pay the price for his wrongdoing, if and when he is so convicted. I do have issue with the fact that many are unwilling to acknowledge and accept the part that they have played in being in this situation, instead choosing to lay all the blame at the feet of DS.

      Personally speaking, I am also very careful about taking as gospel, information that is “put out there” by reliable sources. I have learned in my few years here on earth that even the most accurate information can sometimes contain a speck of inaccuracy that once put through the “communication systems”, can contaminate the whole truth, making the information unreliable at best, or downright false, at worst.

      I guess my advice is that we be careful as to the part we play in promulgating information regarding what has been going on, and take the time to introspect into our own role in bringing this situation upon ourselves. If we feel so convicted that we have been done a grave wrong in this case, then we have the avenue of the legal system to file our claims and receive due process. But let us go about this in a responsible and professional way, leaving out the hate, and the slander and the unkind communications. Use the avenues of justice available to you, but be responsible in your communications.

      • Just to clarify, my references to “you” and “your” were not meant to refer to you personally, but rather general … to everyone.

  3. @bingy bert
    In all that has happened, we need to put things into perspective. We need to lay blame for the current situation, not only at the feet of DS and his Olint operations, but also at the feet of every person who invested in the scheme.

    Very true…
    Investors(christian ones too)
    1. encouraged a clearly unregulated if not illegal activity and prayed for the unregulated if not illegal activity to continue, despite the warnings and red flags …
    2. encouraged other christians to put their money in the unregulated schemes…

    Many lessons to be learnt.

    For those who are christians and others, we all have sinned and fallen short… but answer this. When does restoration come?

    No Excuse, OLINT had the smell of wrong written all over it, but many jumped in, blindy by greed, others too weak to stand alone like Daniel. Truly the “love of money is root of all evil”…

  4. Bingy,

    In a previous post I wrote about this need that some people seem to have for DS to be found guilty of fraud before they will accept that he had operated the largest ponzi scheme in the caribbean and in so doing had defrauded thousands of persons.

    I also pointed persons to an article in which the writer wrote about the need for defrauded persons to hit the fraudster hard and fast and where it hurts most.

    For the life of me I simply cannot understand how people can lose money( ie not getting paid is equivalent to losing), and still find time to make excuses for Olint or his feeder clubs.

    I cannot see why people believe that he was trading and have heavy losses, as being the reason for them not getting paid.

    Its these persons who are the ones who by their action or lack thereof will ensure that David Smith escape with their riches, and receive little or not time in prison.

    Why the wait ? For the life of me I simply cannot understand that thought process.

    I am therefore lead to believe that many simply have not learned anything from this fiasco, and are therefore doomed to make the same mistake again.

    They believe DS, when he said he was a trader. They believed him, when he said he was a good christian, they are therefore waiting for him to confess to running a ponzi, before they believe that he did in fact run on.

    If David Smith lied about his trading skills, and about his faith, why would he not lie to keep his illgotten riches.

    Think folks.

  5. David Smith and wife arrested on September 28 , 2009, bail refused for David Smith but wife given bail for health reasons. 30 additional charges filed

  6. Smith may face a life time in jail
    Apart from the numerous charges in TCI we have not heard whether he could face charges also in Jamaica

  7. As someone who lost big time in olint I am still confused ….. why is it necessary to not have this played out in court and the judge make a final ruling…

    let me ask a question if i (and my friends) go now to the authorities to levy a charge against DS does that mean another set of charges…..this needs to be tried in court!!!

    Why lock up DS when he has been attending all court hearings and the prosecution has not come fwd with a case???

    If DS has done wrong and the court rules that he be sentenced so be it…..but until then this makes no sense locking up someone before his oct 26 court date.

  8. Good points Bingy Bert….a balanced and objective perspective….we who invested are all also guilty of bad choices…I accept responsibility…so shld other investors!!!

    BTW How much has the liquidator charged so far? i bet those who have put in claims will have a significantly reduced amount much lower than the paltry 13m after the liquidator is finished…. like the robbery with cashplus.

  9. Jay..am I out of detention?

    Bingy are you the Bert Middleman or an associate?

    Look ny analysis that olint is just a ponzi scheme gone bad is short. Then why is dudus olint account on thisblog?

    Olint is money laundering…not just ponzi. Why is there an email with Hibbert who is investigated by SFO?

    Why is there an OLint email with Ian Moore who is now under investigation with the contractor general?

    Why is a major Minister of Government a feeder club operator?

    hehehe….Wantmymoney….I told you over a year ago…U.S.A…is it that you doubt? Or want to seem to doiubt.

    Bert….Study the history of this blog….what I say is bankable.

    Right Jay?

    Wonder of you blocking me today. I know I hit a nerve the other night and even you wonder how I knew ….hahahahaa

  10. You soon see how it go with Boarder Town Jared Martinez the Mex. Chester? Marvin?

    “Without you the conference…” Wrong Jungle?

    Jungle B ?

    Judy Jones get back some bond money…Northstar…you day coming in the United States of America.

    Panorama? Everyone frets on that one…Time will Tell? That’s a Bob Marley
    song

    Peace Out

  11. Still waiting to sue the middlemen/pigs?

  12. Think and check next time…before you press ‘send’ or ‘reply’

  13. Wantmy money

    A di same questions I am asking. We have been waiting for months to have the breda tried on a set of charges. The good thing is this you cannot hold a man in jail for months without having his charges ready to be tried. SOOOO this is probably a good thing LET US SEE!!!

    floridian

    Yuh mix up and blemda like tun cornmeal

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