DETROIT – A former FBI special agent has pleaded guilty in Detroit to defrauding investors in a foreign currency trading scheme and agreed to pay more than $576,000 in restitution to victims.
Jeffrey Royer pleaded guilty to one count of wire fraud.
Recommended Videos
As part of his plea, court documents revealed that Royer admitted he defrauded multiple investors by falsely representing how their money would be used and by misleading them about the performance of their investments.
Prosecutors said Royer told investors their funds would be used for foreign currency, or forex, and commodity futures trading.
Instead, he admitted diverting some of the money for personal expenses.
Court documents revealed that Royer also falsely assured investors that their principal was protected from losses and that they would receive guaranteed future earnings.
According to court records, after suffering substantial trading losses, Royer repeatedly misled investors about the status of their accounts.
He admitted to providing fabricated monthly account statements that falsely showed significant gains while the investments were actually losing money.
Federal authorities said Royer’s conduct also violated multiple regulatory requirements under the Commodity Exchange Act.
Under the terms of his plea agreement, Royer agreed to pay $576,818.83 in restitution to the victims.
The case marks Royer’s second federal conviction.
Royer was released from federal prison in 2012 after serving a sentence stemming from a corruption case in which he was an FBI agent.
He was convicted of racketeering conspiracy, securities fraud conspiracy, securities fraud, obstruction of justice, and witness tampering.
Prosecutors said Royer abused his position with the FBI by obtaining confidential information about companies under investigation by the FBI and the Securities and Exchange Commission.
He then passed the information to a short seller in exchange for promised cash payments and future employment opportunities.
Authorities said the trader used the confidential information to establish short positions in the stocks of companies under investigation.
Royer is scheduled to be sentenced Sept. 3. He faces a maximum sentence of 20 years in prison.