Massachusetts officials have charged Charles L. Erickson with taking $3.5 million from at least 25 investors, about a third of whom he had met at a church in Ashland, where he was a church elder.
“Erickson believed that the ‘Holy Spirit’ had given him a proprietary system for day trading a particularly volatile type of futures contract,’’ said the state’s administrative complaint. The accusations were made Tuesday, just two days after churches worldwide celebrated Trinity Sunday, which recognizes the doctrine of one God in three persons (Father, Son and Holy Spirit).
The document also explained that the alleged fraudster “pooled investor funds into online brokerage accounts and began trading pursuant to his purportedly divine system.”
Erickson started the scheme in 2010 and promised investors returns of 4% a month, or 96% over two years. He used spreadsheets of profitable trading results to lure parishioners and others into giving him money over a period of about four years.
“In reality, however, Erickson’s spreadsheets were nothing more than promotional tools, showing only hypothetical profits and losses,” the complaint said. “Erickson never disclosed actual profits or losses to his investors.”
Erickson admitted to state authorities that when his system was unprofitable, he would pay monthly returns to investors with capital reserves deposited by later investors.
The regulators found that $1.5 million of the $2.8 million Erickson raised over a two-year span was transferred to his brokerage accounts, while remaining funds were kept in his checking account.