It was a Ponzi scheme that traded on faith and friendship, according to papers filed in federal court in Newnan.

Federal officials are accusing long-time Peachtree City resident E.A. Gresham with swindling at least 75 investors out of their savings, including retirement funds, by distributing falsely inflated reports of market-beating rates of return.

The U.S. Commodity Futures Trading Commission (CFTC) on July 9 charged Eldon A. Gresham, doing business as the Gresham Company, with operating a multi-million dollar foreign currency (forex) Ponzi scheme, specifically targeting persons of the Christian faith to invest in the scheme. Federal court documents said Gresham solicited at least $15 million from more than 75 people.

CFTC is seeking a variety of civil penalties and remedies in U.S. District Court for the Northern District of Georgia in Newnan. The CFTC complaint, filed July 2 alleges that Gresham’s “massive Ponzi scheme” began in January 2004, and continued up until this year.

His gimmick was “trading off-exchange foreign currency contracts (forex).” Gresham allegedly claimed to prospective customers that he was successful trading forex because the “Lord had blessed him,” investigators said.

Attempts to contact Gresham at his home were unsuccessful.

Court documents indicate that Gresham informed prospective customers that because of his purported success in trading forex, he would be able to generate tremendous monthly returns, ranging from approximately 5-10 percent, and he told existing customers that he was making between 4-13 percent a month for them.

But that was not the case, said CFTC investigators.

“Gresham, however, lost money in the limited forex trading in which he engaged. Any purported profits paid to Gresham’s customers came from either existing Gresham customers’ original investments or money invested by subsequent customers. It appears that, at most, slightly over $2 million of the more than $15 million that Gresham solicited from customers was deposited into Gresham’s forex trading accounts. Of this $2 million amount, more than $1.4 million was withdrawn by Gresham and approximately $90,000 was lost trading forex. At least $14.4 million, therefore, was either misappropriated by Gresham or returned to customers as part of the Ponzi scheme,” court documents said.

CFTC investigators said prospective customers were told that Gresham’s trading program involved very little risk, adding that Gresham consistently communicated bogus monthly returns to customers through emails. Gresham has never been registered with CFTC in any capacity, investigators said.

According to the complaint filed in court documents, Gresham solicited some customers to invest supposedly by opening and funding an account for them based on their friendship over the years. After receiving a string of emailed statements showing purported extraordinary monthly returns of between of 4-13 percent, many customers began to contribute their personal funds into accounts with Gresham.

Gresham allegedly persuaded some customers to temporarily withdraw their retirement funds by telling them that he could earn 5-10 percent a month on these funds. He claimed that by doing so, customers could attain profits in less than 60 days.

According to Gresham this would enable them to transfer the principal, and expected large profits, back into the retirement accounts before an early withdrawal tax penalty would be assessed.

According to the complaint, as the Bernard Madoff Ponzi scheme unfolded in late 2008, Gresham told concerned investors that all their funds with him were safe and would be returned to them when due. The CFTC alleges that these statements were lies because Gresham never had sufficient funds on hand to return all customers’ principal, much less purported returns on their investment.

Along with Gresham, the court documents also named three relief defendants in the case. Those include Werner H. Beiersdoerfer of Calera, Alabama, Interveston Wines, LLC, a Georgia company located in Calera and owned by Beiersdoerfer, and Gresham’s son Kirk M. Gresham of Newnan.

“Each of the relief defendants whom have received ill-gotten gains to which they do not have legitimate claim as a result of the fraud committed by Gresham,” court documents said. Those gains must be repaid, investigators maintained.

CFTC research showed that Gresham began trading forex in 2002 with Beiersdoerfer, a long-time friend who had given him money to initiate the trading. Sometime around January 2004 Gresham began soliciting the general public, specifically targeting Christians.

In exchange for their money Gresham provided a promissory note entitled “Investment Agreement” in which he promised to return the principal investment plus a specified percentage of the profits. The term of the promissory notes was initially six months, though they eventually increased to one year, according to court documents.

Court documents further note that Gresham told customers he could make money whether the market was “up, down or sideways.”

Investigators maintained that though he received more than $15 million from more than 75 customers to trade forex, the vast majority of those funds were never used in forex trades.

“The vast majority of the customer funds were either misappropriated or paid to certain customers in furtherance of the Ponzi scheme. As the sole signatory, Gresham controls the bank account in which customers funds are received, paid out to certain Gresham customers or misappropriated,” court documents said.

Beginning in May or June 2009, a number of Gresham customers asked for their funds, investigators said. Nobody has yet received any of those requested funds, officials said.

In a portion of the documents relating to the relief defendants, investigators said Beiersdoerfer purportedly contributed money to certain investors’ accounts to “... show his appreciation for all they had done for Gresham in the past. Beiersdoerfer took several existing and prospective Gresham customers and their wives on lavish trips to the mountains in Tennessee and to the beach in Florida. During the trips, Beiersdoerfer shared how well he had done investing with Gresham and told them Gresham always makes money trading forex.”

Gresham reportedly told at least one customer that her investment was insured by the federal government, according to investigators. Gresham also represented to customers that his son Kirk worked with him and would be able to maintain the accounts if anything should happen to him.

Kirk Gresham worked with his father for the past 18 months, investigators said, and unsuccessfully traded forex in seven different accounts as a futures commission merchant between October 2007 and December 2008.

Beiersdoerfer-owned Interveston Wines, LLC, received more than $145,000 in customer funds from Gresham between 2004 and 2009, court documents said.

CFTC is asking the federal court for relief that would include full restitution, an order directing Gresham to rescind all agreements with his customers, the payment of a civil penalty of $130,000-$140,000 for each violation or triple the monetary gain to each defendant and post-judgment interest.

The complaint filed in federal court is a civil — not a criminal — action, and sought an injunction to halt Gresham’s activities, to freeze all related accounts and to safeguard relevant documents for investigators.