DO YOU KNOW CLEAL WATTS III OF DALLAS, TEXAS?
If so, we want your help.
UPDATE 6/14/16: JUDGMENT FINAL – NO LONGER APPEALABLE. (READ HERE).
On February 29, 2016, the United States District Court for the Western District of Tennessee determined that Defendants Cleal Watts III and Indico System Resources, Inc. had perpetrated a multi-million dollar gold fraud on our clients. In reaching this conclusion, the Court granted us “summary judgment” and awarded our clients, three Memphis-based Plaintiffs, $22 million in damages. In addition to making detailed findings of fact and conclusions of law detailing each step of the Defendants’ fraud, the Court issued a permanent injunction, effectively freezing the Defendants’ assets and barring any third-parties from aiding and abetting the Defendants in dissipating any of the subject funds.
You can read the Court’s “summary judgment” Order here by clicking below. The Order does a fairly good job of telling the story.
To thumbnail, Defendant Cleal Watts (individually and on behalf of his company, Indico System Resources, Inc.) promised the Plaintiffs in 2011 that he was an experienced importer of gold dust, that he owned a refinery in Dallas, Texas, and that the Plaintiffs’ funds would be used to purchase and refine gold dust from Africa in order to generate substantial returns in the United States. It would take three years of litigation for the Plaintiffs to learn that none of this was true.
Instead, Watts took millions of Plaintiffs’ dollars. Some he wired to his own trading accounts (without telling Plaintiffs). Some he used to pay his daily expenses. He wired the vast majority of it from his accounts at Bank of America and Chase to a foreign account at a Nigerian bank called Guaranty Trust Bank Plc for the benefit of a Sierra Leone national named Sheku Kondeh. He would also himself – and through surrogates – use Western Union and Moneygram to send Kondeh money. Kondeh was supposedly Watts’ contact on the African continent.
After more than a year and a half, Watts never produced any gold, refunded any money or produced any return on investment. When our clients would demand answers about the delays, Watts would tell grandiose stories about hijackings, theft, customs issues and storage challenges, all to coerce more money out of our clients. He would routinely say that “the only way you lose in this is if you quit.” He would also send the Plaintiffs newspaper articles from Africa and court documents, later determined to be fake, to support his stories.
Plaintiffs filed this lawsuit in June 2013.
Watts did not tell the Plaintiffs that he had used the same story at least ten times previously on many other victims and had, in fact, never successfully imported and refined gold dust for any other investor. During this litigation, we found and spoke with most of these other prior victims (and even two investors who had given Watts money after our clients did). It turns out that Defendant Watts also never mentioned to our clients that he had no other source of income, had no real assets, had never filed a tax return and was, essentially, living off of our clients’ funds.
On November 18, 2015, the United States Department of Justice notified Watts that it had determined that the gold investments comprise “a fraudulent scheme” and that Watts should immediately “cease and desist” from soliciting funds for gold purchases and from sending money to Africa.
The Court has granted us an award of $22m, which includes the Plaintiffs’ initial invested funds, plus trebled (tripled) damages and interest.
Now, we need your help to gather information about Defendant Watts, his other enterprises, other solicitations and victims, and any information about his use of Plaintiffs’ funds.
Please contact us, counsel for the Plaintiffs in this case, if you have any information at all that might be helpful.