A Portland man was indicted on charges of fraud and money laundering Oct. 19 stemming from allegations he bilked millions of dollars out of investors, including a Lake Oswego couple.
James R. Mast was indicted on charges of fraud and money laundering related to activities at his day trading business in Hillsboro. The indictment alleges that, beginning in 2001 and continuing into 2004, Mast defrauded numerous investors out of millions of dollars by soliciting investments for three businesses, allegedly for the purpose of day trading.
The indictment alleges Mast made numerous misrepresentations of his businesses - known as Enhanced Financial Services, Inc.; GlobalTech Partners, Limited Partnership and GlobalTech Trading Group, Inc.
An investigation by the IRS and the U.S. Postal Inspection Service netted a quarterly statement from GlobalTech Partners to a Lake Oswego couple, who allegedly invested in the day-trading program. The Lake Oswego Review is withholding the name of those alleged victims.
Mast allegedly told investors their funds were to be used in a day trading program, that the program had been profitable every month for several years, that he had attained double-digit growth and annualized returns in excess of 100 percent and that risk of loss was minimized through 'money management' techniques.
The indictment alleges that while Mast solicited approximately $5.4 million in investor funds for his business bank accounts, only a small portion was ever sent to trading accounts, the vast majority of which was lost.
The indictment also charges Mast used millions of investors' funds to promote a scheme to defraud them and to pay for personal expenses, including cars, furniture, a boat, landscaping for his home, a swimming pool, gifts to a girlfriend, gambling, real estate purchases and investments in companies and cash.
The allegations indicate that the scheme to defraud investors started to collapse in July 2004, when Mast announced in a letter dated July 18, 2004, '... we have experienced our first losing quarter...'
However, the grand jury charged that from commencement of trading in May 2001 through February 2005, Mast either engaged in no trading or sustained quarterly losses in GlobalTech Trading's combined trading accounts.