Dallas Cowboys legend Emmitt Smith is tangled in an alleged Ponzi scheme that has created a legal battle between the Hall of Famer, a North Texas businessman and a foreign investment firm under fire from the U.S. government.
Smith, along with co-plaintiff Mark Page, says in a lawsuit filed in Dallas County Court that they were directed to invest at least half a million dollars in Traders Domain FX, a company being sued by the U.S. Commodity Futures Trading Commission.
They say Southlake’s Johnny Wimbrey, an associate of Smith, helped facilitate the investment, along with other people.
The lawsuit says Wimbrey, Traders Domain FX and others participated in fraud, unjust enrichment and conspiracy, among other things, according to a court document filed at the end of last year.
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They are seeking no less than $500,000, legal fees and other damages. The document referred to the defendants collectively as Wimbrey and Partners.
Wimbrey is an author and speaker who touts endorsements on his website from Smith, T.D. Jakes and Nancy Lieberman, among others. He has denied the allegations in court filings.
The dispute goes back to 2022. The court document says Wimbrey and others solicited and/or accepted funds from individuals under false promises for trading “leveraged or margined retail foreign currency exchange” — and similar gold U.S. dollar pair transactions.
The document states the funds were not used for those trades but were funneled to separate bank accounts controlled by two of the defendants —and misappropriated for other purposes by defendants.
“Defendants made material misrepresentations and omissions regarding where they would maintain Plaintiffs’ funds, how the funds would be traded, and who would do the trading,” the document said. “Defendants also provided plaintiffs with false information” about historical trading profits.
Smith and Page transferred no less than $500,000 to Wimbrey.
“The plaintiffs agreed to transfer their money to defendant Domain on the basis of representations that their funds would in fact be invested and could be withdrawn upon request,” the court document said.
Daily statements contained material misrepresentations, the document said. “… The plaintiffs had no ability to access their invested funds and their purported earnings were non-existent.”
In 2022, Traders Domain was placed on the “RED List,” by the Commodity Futures Trading Commission. It said the entity is acting in a capacity that appears to require registration, but it is not registered with the CFTC.
“Plaintiffs maintain that defendant Domain was at all times a Ponzi scheme,” the court document said.
Despite efforts, the plaintiffs’ funds were not returned — nor have they received significant earnings, which defendant Traders Domain represented had been generated from their investments.
In filings, Wimbrey denied the allegations and maintains he did not control or direct the funds. Wimbrey’s filings say Smith engaged in unauthorized conduct, syndicating funds in Wimbrey’s name without authorization.
Smith’s lawyer Eric Walker pointed to a ruling that a counter-claim attempt by Wimbrey was already denied by the judge in the case.
“It is unfortunate that Mr. Wimbrey is attempting to drag my client’s name through the mud instead of returning the money he took from him through fraud and deception,” Walker said in an email. “We will litigate the case against Mr. Wimbrey in Court, and not in publications.”
Wimbrey’s lawyer Kyle Coker of Dallas-based Farmer Coker law firm said that the counter-claim has been refiled.