Former Trading Firm Executives Found Guilty of Fraud

DENVER – The U.S. Attorney’s Office for the District of Colorado announces that Michael Shawn Stewart, 61, of Scottsdale, Arizona, and Bryant Edwin Sewall, 57, formerly of Little Elm, Texas, were found guilty by a jury of 14 counts of wire fraud and conspiracy to commit wire fraud.

Evidence presented at the three-week trial showed that Stewart and Sewall were owners and executives of companies operating on various Caribbean islands under the names Mediatrix Capital and Blue Isle Markets.  As part of the scheme Stewart and Sewall provided false and fraudulent information about an algorithm-based foreign currency exchange (“ForEx”) trading program to potential investors and to salespeople they were using to solicit investors. For example, Stewart and Sewall falsely represented that Mediatrix had a history of successful ForEx trading going back to 2013 with no months of losses when, instead, Mediatrix did not exist until 2014 and its trading history included many months of net losses. Mediatrix promised its investors “100% Transparency,” “100% Liquidity” and “World Class Returns.” 

Additional evidence at trial showed that after luring investors into the scheme Stewart and Sewall fraudulently induced them to stay by manipulating account statements to show only positive trades while intentionally hiding massive losses that substantially reduced those investors’ accounts.  By the end of the scheme, Stewart and Sewall had promised investors over $179 million but had only $9.8 million in their accounts, a gap that they internally referred to as “the hole.” Even as they lost approximately $32 million in trades, Stewart and Sewall rewarded themselves with approximately $30 million in performance fees.  They also used their brokerage, Blue Isle, to fraudulently convert investor money into over $40 million in markup fees. They spent the money on real estate, boats, cars, jewelry, and other luxuries.

“Holding white-collar criminals accountable for fraud like this is a key part of the work that we do," said United States Attorney for the District of Colorado Cole Finegan.  “This was a complex scheme and these guilty verdicts are a reflection of the outstanding work of our prosecutors as well as the exceptional work of our partners at the FBI.”  

“The defendants orchestrated an elaborate foreign currency investment fraud scheme that caused extensive financial harm to unsuspecting victims,” said Special Agent in Charge Mark Michalek.” “FBI Denver will continue to investigate and seek justice for individuals who fall victim to criminals who cheat and lie their way into victims’ pockets.”

United States District Judge William J. Martinez presided over the trial.  Sentencing will be held in November 2024.  Each count of wire fraud carries a maximum penalty of twenty years of imprisonment, three years of supervised release, a fine of $250,000 or twice the gross gain or loss resulting from the offense, and a $100 special assessment.  The conspiracy count carries a maximum penalty of five years of imprisonment, three years of supervised release, a fine of $250,000 or twice the gross gain or loss resulting from the offense, and a $100 special assessment.

A third partner involved with Mediatrix and Blue Isle — Michael Young — previously pleaded guilty to making a false statement to the Securities and Exchange Commission and will be sentenced on June 11, 2024.

The Federal Bureau of Investigation’s Denver Field Office conducted the investigation. Assistant United States Attorneys Anna Edgar, Bryan Fields, and former AUSA Pegeen Rhyne handled the prosecution.

Case number:  21-cr-00034-WJM