Latest Legal News from the Criminal Courts of Los Angeles, California and the U.S.

June 15, 2007

Mark Todd Hauze charged with eleven counts of mail fraud and eight counts of wire fraud.

United States Attorney Karen P. Hewitt announced that today a federal grand jury sitting in San Diego handed up an indictment charging Mark Todd Hauze with eleven counts of mail fraud and eight counts of wire fraud, all arising from Hauze’s operation of foreign currency trading fund named “Universal Money Traders” (UMT), located in Solana Beach, California.
According to the indictment, from 2002 to 2005, Hauze allegedly used sales agents, a website, and other means to fraudulently solicit more than $10 million from members of the public, supposedly for participation in foreign currency trades. The indictment alleges that Hauze induced people to invest their retirement accounts and other funds in UMT by falsely representing, among other things, that UMT’s foreign currency trading had generated annual returns of 30 percent or more, that UMT used a guaranteed “stop-loss” system that limited a client’s potential losses to 15 percent of each $2,000 trading position, and that clients could receive accurate information about their account balances and trading results through readily-accessible online account statements.

The indictment also alleges that Hauze intentionally concealed from UMT’s clients that, in reality, UMT did not use a guaranteed stop-loss, and that UMT regularly reported bogus trading results and false account balances to the clients. The false trading reports caused UMT clients to believe that their account balances were growing, when, in fact, Hauze had substantially dissipated the clients’ funds through trading losses, commission charges, and other means. The indictment further alleges that Hauze converted a substantial portion of the clients’ funds to his own personal use, and that he used new money received from UMT clients to fulfill withdrawal requests made by other clients. According to the indictment, around March 2005, when UMT failed to honor withdrawal requests made by UMT clients, Hauze falsely represented that UMT could not timely process the requests because the client accounts were temporarily frozen for an audit.

United States Attorney Hewitt said, “Everyone in our community should be wary of investment schemes which promise pie-in-the-sky returns with little or no risk.”
Kathy Leodler, Acting Special Agent in Charge, Federal Bureau of Investigation, San Diego Field Office, said, “The FBI is committed to protecting honest citizens from fraudulent investment schemes. The FBI will continue to investigate criminal activity in the markets and against investors whenever it arises.”

According to Assistant United States Attorney William P. Cole, who is prosecuting the case, Hauze is expected to surrender to the FBI in San Diego later this week.
DEFENDANT Criminal Case No. 07-CR-1435-W
Mark Todd Hauze

SUMMARY OF CHARGES
Counts 1-11
Title 18, United States Code, Section 1341 - Mail Fraud Maximum penalties (per count): 20 years in prison and a fine equal to twice the gross loss caused to persons by the offense.
Counts 12-19
Title 18, United States Code, Section 1343 - Wire Fraud Maximum penalties (per count): 20 years in prison and a fine equal to twice the gross loss caused to persons by the offense.
PARTICIPATING AGENCY
Federal Bureau of Investigation
An indictment itself is not evidence that the defendant committed the crimes charged. The defendant is presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.

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CALIFORNIA CRIMINAL DEFENSE LAWYER

JOSEPH SHEMARIA

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Latest Legal News from the Criminal Courts of Los Angeles, California and the U.S.