Monday, December 19, 2011

The Jack Lee Smiley Case

I can't believe that I'm just now finding out about this, but here's another case of a dinar dealer being arrested for fraud.

July 1, 2009

Idaho seizes Iraqi dinars in investment scheme case

The state of Idaho has seized about $1 million worth of Iraqi dinars purchased in a Coeur d’Alene man’s investment scheme.
Jack Lee Smiley purportedly promised to turn a $1,000 investment into a $1 million windfall for investors who’d give him money to buy up Iraqi dinars. He told investors the dinars would increase in value when a new currency – backed by the United States, England and Israel and tied to oil contracts – was issued in late 2007, court records said.
Smiley ran the promotion from 2004 until April 2007, despite a 2005 cease-and-desist order issued by the Idaho Department of Finance. About 130 investors gave Smiley a total of approximately $1 million to buy dinars, according to department records. About half of the investors were from Idaho.
Smiley was jailed in October 2008, for refusing to comply with a court order to turn over the dinars. Jim Burns, investigations chief with the Department of Finance’s Securities Bureau, wouldn’t say Tuesday how or where the money was recovered. The Secret Service helped verify the currency’s authenticity and count the 1.2 billion dinars.
Earlier court reports indicate that a witness saw “a great many dinars in the trunk of Smiley’s car.” His van has been in storage while Smiley was in jail.
On Thursday, Smiley will be released from jail, because the dinars are now in the state’s possession.
Five investors attended a Tuesday hearing on Smiley’s release in 1st District Judge John Mitchell’s courtroom, but they declined to comment.
The dinars, worth less than a penny each, will be used to pay restitution.
“While the Iraqi dinar has appreciated only a fraction of the amount promised by Mr. Smiley, recovery of the dinars should provide investors with an opportunity for substantial recovery,” Finance Department Director Gavin Gee said in a statement.
Part of Smiley’s sales pitch was allegedly telling people that “Halliburton, large banks, corporations, politicians and the U.S. military” would reap millions from the new currency.
He violated Idaho’s Commodities Act, which regulates foreign currency trading, by making false reports, the Finance Department said.
The Department of Finance sued Smiley in 2007. Judge Mitchell found Smiley guilty of securities fraud last year and ordered him to pay restitution to the investors.

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