Currency Trader Is Accused of Fraud

White Pine Trust Corp., a San Diego currency trading firm, may have cheated hundreds of investors out of as much as $30 million by fraudulently soliciting money for trades, the Commodity Futures Trading Commission said Tuesday.

Millions of dollars that White Pine collected from customers were used to make personal and business purchases at Saks Fifth Avenue and other retailers, the CFTC said. The allegations are contained in a complaint against White Pine and its managing director, Richard Matthews, filed in federal court in the Southern District of California.

The case is part of a government campaign against currency fraud that began in December 2000, when Congress gave the Washington-based CFTC the legal authority to pursue such cases.

“We spoke to Mr. Matthews about his activity and he lied to us,” Associate Director Gretchen Lowe said. “This is a classic case as to why the CFTC needs to be out there addressing this type of fraud.”

White Pine told customers it had an eight-year winning track record even though it hadn’t been incorporated until 2000, according to the CFTC. White Pine and Matthews control accounts into which they have deposited more than $30 million, which “may consist, in part, or entirely, of customer funds obtained from hundreds of customers,” the CFTC said in a statement.

Judge John Houston confirmed an Oct. 21 restraining order freezing the assets, the CFTC said.

Neither Matthews nor other White Pine executives could be reached for comment. Lowe said neither defendant had a counsel of record.