ASHE COUNTY — Keith Simmons of West Jefferson, who was sentenced to 50 years in prison in connection with a $40 million Ponzi scheme, was recently ordered by a federal judge to help pay $76 million in civil penalties.
Simmons was the owner of Black Diamond Capital Solutions, LLC and High South Realty in Jefferson and reportedly solicited and accepted approximately $40 million from more than 400 victims nationwide, including Ashe County, from April 2007 through Sept. 2009.
Simmons was convicted of one count of wire fraud, one count of securities fraud and two counts of money laundering in 2010 and was ordered to pay more than $35 million in criminal restitution as well as forfeit property, a vehicle, funds obtained from the sale of real estate and funds obtained from the sale of shares of ultimate fighting companies. He was sentenced to 50 years in prison in 2012.
“A 50-year sentence is an enormous sentence, but there seems to be no other sentence…that would accomplish justice in this case,” Judge Robert Conrad said during the 2012 sentencing.
Simmon’s co-conspirator Deanna Salazar of Yucca Valley California was convicted on charges of fraud conspiracy and tax evasion. She was sentenced to 4.5 years in Dec. 2010 and ordered to pay $5 million in criminal restitution.
On Friday, July 31, the U.S. Commodity Futures Trading Commission (CFTC) announced that Judge Robert J. Conrad, Jr. of the U.S. District Court for the Western District of North Carolina entered separate Consent Orders against Simmons and his company, Black Diamond Capital Solutions, LLC and Deanna Salazar and her companies, Life Plus Group, LLC and Black Diamond Holdings, LLC.
The Orders find that Simmons, Salazar and their companies fraudulently solicited and accepted millions from their victims, telling them he was putting their money in a foreign currency trading program (off-exchange forex) known as Black Diamond. It was found that the trading program didn’t exist and Simmons and Salazar misappropriated millions of dollars of customer funds.
According to filed court documents, the defendants operated “hedge funds” as part of the Black Diamond Ponzi scheme, and in doing so, lied to get money from their victims by claiming, among other things, that they had done due diligence on Black Diamond and were operating legitimate hedge funds with significant safeguards when, in reality, neither claim was true.
According to filed documents and court proceedings, when Black Diamond began collapsing, the defendants and others created a new Ponzi scheme and with a separate Ponzi account. Thereafter, new victim money was deposited into the Ponzi account and used to make Ponzi payments to other victims and to fund the defendants’ lifestyles.
According to CFTC, Bryan Coats of Clayton, North Carolina and his company, Genesis Wealth Management, LLC, and Jonathan Davey of Newark, Ohio and his companies, Divine Circulation Services, LLC, Divine Stewardship, LLC, Safe Harbor Ventures, Inc., Safe Harbor Wealth Investments, Inc., and Safe Harbor Wealth, Inc. were also charged.
The CFTC’s litigation against these Defendants is ongoing.
Hannah Myers can be reached at 336-846-7164 or on Twitter @cmedia_hmyers.