Colorado Man Pleads Guilty to Ponzi Scheme

by ParkmanLawFirm on July 31, 2013

Shawon McClung, who began Flint-McClung Capital LLC in Indiana, has pled guilty to running a Ponzi scheme totaling losses of over $1.7 million.  According to court documents, McClung entered into financial discussions in 2008 with a software programmer to create proprietary software to make automated trades on the foreign currency market.  McClung moved FMC from Indiana to Denver, CO in November of 2010 and reached an agreement with the software programmer on December 15, 2010 to provide funding for the new software.  However, McClung only provided $213,000 of the originally agreed amount of $614,790.  The software program was never completed and not available for FMC to sue.

From March of 2009 to April 2011, McClung solicited investor money by representing that FMC owned and operated a proprietary “massively parallel automated trading system” to trade currencies on the foreign exchange market.  He lied to investors and told them that the software was already being used at FMC and had a history of success.  McClung represented that his investment programs had received returns of 15 to 100 percent every 14 to 30 days.

As is the case with most Ponzi Schemes, McClung was able to make some of the promised payouts to early investors using funds received from new investors.  The stories of these successful returns spread which reassured others about investing their money with McClung.

In March of 2011 sent several investors an email document falsely representing that he would return an amount of money if the investor signed and released McClung and others from liability.  After receiving the signed “Cancellation of Contract and Account Settlement” from many investors, McClung did not make the promised payouts.  In total, the government believes 17 victims lost a total of $1,756,750.

Shawon McClung now faces a maximum prison sentence of 20 years and no more than three years of supervised release.  He must pay fines up to $250,000, a $100 special assessment fee, and $1,756,750 in restitution.   McClung is free on bond and a sentencing hearing has been scheduled for November 6, 2013.

If you find yourself facing criminal charges, it is important to find an experienced attorney to represent you.  The attorneys of Parkman & White, LLC have a history of success in the court room and are ready to represent clients nationwide.


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