Back in September 12, 2008 some investor tipped off the National Futures Association on Capital Blu Management LLC, which had its assets frozen and files removed from its office in Naples, Florida, by the U.S. Commodity Futures Trading Commission. Blayne Davis’ offices were raided on Gulf Shore Boulevard North, Naples.
The U.S. District Judge John Antoon II in Orlando determined that the senior partner, Blayne Seth Davis (28), and partners, Donovan Davis, Jr., of Palm Bay, and Damien Bromfield, of Ocoee, misappropriated funds for their personal use by purchasing luxury automobiles, private jet charters, and a $40,000 two-night stay at a “gentlemen’s club.”
Judge Antoon ordered them to pay more than $17 million for defrauding over 100 investors in an international currency trading scheme. In his order, they defrauded family members and friends, issued false statements to investors, commingled investment funds, and misappropriated money provided by investors – all in violation of the Commodity Exchange Act.
Based in Melbourne, Capital Blu Management also had offices in Orlando. The judge ordered the men, Capital Blu Management, and DD International Holdings LLC (DDIH) of Palm Bay to jointly and severally pay more than $2.46 million restitution to investors and $4.92 million each in civil penalties. They are permanently barred from commodity-related activities, trading, and registering with the Federal Trade Commission (FTC).
Donovan Davis, Jr., and Damien Bromfield were on hand at the trial in Orlando where the federal jury returned the verdict that they “operated a fraudulent commodity pool to invest in off-exchange foreign currency futures.”
Blayne Davis had left the country for Australia to live with his father, Charles, where he was served with a federal complaint by an Australian securities agent. The judge entered a default judgment against him, Capital Blu, and DDIH.
Testimony showed that Blayne Davis and others misreported the losses and gains through the trading company, DDIH, and the commodity pool, Capital Blu. Then the three planned to recover the loss funds by raising more money from other investors, frenzied trading, and falsifying statements to investors. Fund money was intermingled with operating expenses.