Ex-preacher who traded currencies while running Charleston church settles Ponzi suit for nearly $3.5 million
A former Charleston pastor accused in a government lawsuit of running a Ponzi scheme has agreed to pay nearly $3.5 million to end the litigation.
Ronald E. Satterfield also is permanently barred from the commodities industry under a consent order filed in U.S. District Court this week.
Whether Satterfield has the financial means to repay the $2.54 million penalty and the $957,146 in restitution for victims is uncertain. He previously has maintained that he had used all of his savings and that he could not afford to hire a lawyer.
As part of the agreement he signed with the Commodities Futures Trading Commission, Satterfield neither admitted nor denied the allegations the federal agency made in its 2010 lawsuit. He could not be reached Friday for comment.
Satterfield’s troubles with regulators at the commission started while he was still serving as pastor at St. John’s Reformed Episcopal Church on Anson Street.
It was March 2006 when the preacher began dabbling in a risky side business. The foreign-exchange trading outfit he controlled went by the names Graham Street Forex Group LLC and Shore-2-Summit Financial LLC. It was active for about three years and pulled in $3.3 million from more than 70 investors.
Satterfield solicited some of the money from friends, family and even members of his then-congregation. In those instances, Satterfield instructed the investors “to make their checks payable to him personally and then deposited the funds into his personal bank account, where he commingled the customers’ funds with his personal funds,” the trading commission said in the consent order.
Most other investors were from a lakeside community in western Michigan, where financial adviser Nicholas Bos helped recruit new clients, according to court documents.
Satterfield, who was a novice in the tricky and risky foreign exchange business, lost virtually all the $1.9 million he put to work in the currency markets. Along the way, he and Bos sent customers false account statements showing monthly returns of up to 4 percent, the trading commission said.
Of the other $1.4 million, some of that was never invested at all.
In December 2008, for example, Satterfield sent at least $24,000 to a log cabin builder, the trading commission said. He also paid Bos about $550,000 in commissions and fees, as well as $295,000 that Bos and his wife used to buy a home.
In some cases, money from new investors went to previous investors who were promised specific monthly returns, which spurred regulators to classify the trading venture as a Ponzi scheme. The funds began to run out in February 2009.
The government sued Satterfield and Bos in November 2010.
Bos previously agreed to pay a $2.55 million penalty and pay roughly $850,000 in restitution to settle his role in the case. He and his wife also agreed to return the money they received for the home purchase.
The trading commission, which does not have the authority to file criminal charges, said Friday it plans to issue a written statement about the settlements, probably early next week.
Satterfield, whose last known residence was in Mount Pleasant, filed a series of letters with the court until a year ago. His last detailed correspondence was directed at Magistrate Judge Bristow Marchant and dated May 13.
“I ask that you consider that I did not intentionally defraud anyone,” Satterfield wrote.
He went on to say that he has turned over all financial records and has been truthful with investigators. He also vowed to abstain from trading while acknowledging his failed foreign exchange venture was “inappropriate.”
“I do not disagree that some good people were hurt in this process,” he wrote. “But I did not use these funds for personal enrichment. I tried to pay what I could as long as I could (with) what funds could be paid.”
Reach John P. McDermott at 937-5572.