A Florida businessman has been sentenced to 17 Years in prison for conspiring to defraud investors.

A Florida businessman was sentenced yesterday to 17 years in prison for his role in an investment fraud scheme resulting in over $13 million in losses to dozens of investors, the US Department of Justice said.

Donovan G Davis, 34, of Palm Bay, FL, was found guilty by a jury on May 14, 2015, of one count of conspiracy to commit mail/wire fraud, one count of mail fraud, six counts of wire fraud and eight counts of money laundering. 

He has been ordered to pay over $10 million in restitution jointly and severally with his co-defendants.

According to evidence presented at trial, Davis was the managing member of Florida-based Capital Blu Management, which purported to offer investment and managed account services for investors in the off-exchange forex market. In 2007 and 2008, Davis solicited relatives, friends and associates to invest in Capital Blu, and then around September 2007, he and his co-conspirators formed the CBM FX Fund, which pooled investors’ money into a common fund to be traded by Capital Blu Management. Many of Capital Blu’s managed-account investors transferred their investments into the CBM FX Fund, which sustained significant trading losses, resulting in large losses for its investors. 

“Nevertheless, the evidence demonstrated that Davis and his co-conspirators made a series of misrepresentations to the investors about Capital Blu’s trading performance, the value of the fund and the risks of the fund,” the DoJ said.

In around September 2008, the National Futures Association, an independent self-regulatory organization that oversees commodities and futures trading in the US, conducted a surprise audit of Capital Blu and suspended its operations.  As of September 2008, investors had invested over $16.9 million into the CBM FX Fund and lost over $13 million.

Co-defendant Blayne S Davis (of no relation to Donovan Davis), 34, pleaded guilty in July 2014 to conspiracy to commit mail and wire fraud, and was sentenced to nine years in prison and ordered to pay $13,215,874 in restitution. Co-defendant Damien L Bromfield, 39, pleaded guilty in November 2013 to conspiracy to commit wire fraud and is awaiting sentencing.