Pastor accused of Ponzi scheme

Federal suit claims he lost $1.9M of investors' money

Post and Courier, South Carolina/November 16, 2010

The Rev. Ronald Satterfield preached from the pulpit, but authorities say he also ran a multimillion-dollar financial scam out of his historic church in downtown Charleston for several years.

A federal judge has frozen what few assets remain from the $3.3 million that investigators say Satterfield, rector at St. John's Reformed Episcopal Church on Anson Street, put toward a foreign currency Ponzi scheme using money from 70 investors, according to documents filed Monday in U.S. District Court in Charleston.

Satterfield acknowledged the complaints against him, but he insisted Monday that the allegations made by the U.S. Commodities Futures Trading Commission mischaracterized his trading activities.

"It's not the way they described it," he told The Post and Courier.

Satterfield told investors he could grow a traded pool of money by up to 48 percent during one year, according to court documents. Instead, he lost virtually all of the $1.9 million he invested on their behalf in the trading of foreign currencies, the trading commission said. He used the rest of the money to pay returns to customers until his companies failed in early 2009.

The trading commission said in a Nov. 8 lawsuit unsealed Monday that the pastor, who led prayers during Charleston blacksmith Philip Simmons' funeral last year, asked members of his own 200-person church to invest with him.

"Some people lost some money," he said Monday afternoon, speaking from behind a wrought-iron fence that guards the downtown church.

He said he was successful after he began trading his own money in 2003 in the foreign exchange markets, a type of investment that involves making profits off the changing values of different currencies.

Court documents said he started offering to trade on behalf of others in 2006, just months before former Charleston South University economist Al Parish's own $66 million Ponzi scheme unraveled.

Satterfield did not have a broker's license and was not affiliated with any financial institution, according to court documents.

Satterfield offered to trade money for investors through Graham Street Forex Group LLC, a business entity that is registered to him and shares the same address as his Gothic Revival church. A second company he used, Shore-2-Summit Financial LLC of North Myrtle Beach, was dissolved on Dec. 31, according to the S.C. Secretary of State's office.

The federal lawsuit also named as defendant Nicholas Bos, who ran a financial advisory firm in Michigan. Court documents said Bos advertised his investment services using a business card that resembled a $1 million-dollar bill and claimed participants could earn annual returns of 24 percent, according to court documents.

Bos and his wife, Patricia, allegedly received $295,000 from Graham Street to buy a home in Ludington, Mich., according to court documents. Neither invested personal money with Satterfield, the documents said.

Satterfield's business grew by word of mouth as he offered his services to friends, family and churchgoers, according to court documents. He told customers to make the checks out to him personally, which he deposited to an account that combined that money with his own personal funds, the documents said.

As the financial markets stumbled in mid- to late 2008, he allegedly misled customers about how their accounts performed, calling his financial gains "solid and consistent," according to court documents.

The lawsuit referenced an e-mail message that Satterfield sent to Bos stating the companies "have sailed through these financial storms with nice profit during the last few weeks."

Accounts show he lost almost $142,341 during the last three months of 2008, according to court documents. By February 2009, accounts at both companies "had been virtually depleted" and he began to fall behind in redemption payments to customers, the commission alleged.

Eight months later, Satterfield was hit with a $500,000 judgment by a court in Montgomery County, Md., from a lawsuit filed by an aggrieved investor from that area.

Court documents filed in the Charleston case alleged that Satterfield paid himself commission fees, put $28,000 of customer money into his church and gave $24,000 in late 2008 to pay a company that built log cabins.

Satterfield has not been charged criminally, though Bos told a Michigan television station last year that the Federal Bureau of Investigation was looking into the case at the time. The Commodities Futures Trading Commission only has the power to bring civil complaints.

Satterfield is scheduled to appear at a court hearing Wednesday.

To see more documents/articles regarding this group/organization/subject click here.