PAIR ACCUSED OF BILKING INVESTORS.

Byline: Staff and Wire Services

A Valley father and son have been arrested on suspicion of taking more than $77 million from investors who thought they were putting their money into foreign currency, authorities said Monday.

Bell Canyon resident Moshe Leichner and his son Zvi of Northridge face two counts each of wire fraud.

Efforts to reach attorneys for the Leichners were not immediately successful.

Special Assistant U.S. Attorney Stephen Kramer said the Leichners ran a Sherman Oaks-based business called Midland Euro.

Between July 2000 and December 2002, the Leichners received more than $77 million from more than 100 investors, according to Kramer.

He said the Leichners told the investors that Midland Euro would put their money into foreign currencies to be traded on the international market.

The prosecutor charges that, though the terms varied slightly, the Leichners generally claimed that Midland Euro would generate guaranteed monthly profits of 2 percent to 4 percent and that a percentage of the initial investment - 40 percent to 85 percent - was guaranteed against loss.

Less than 20 percent of the money was actually invested in foreign currency, Kramer said. The Leichners are accused of spending the rest on planes, automobiles and houses.

They also are accused of covering up their use of investor funds by providing their victims with fake documents indicating the money was on deposit in financial institutions.

According to the prosecutor, the National Futures Association audited Midland Euro in October 2001, then barred it doing business in commodities and foreign currency exchange.

Midland Euro employees shredded documents before the audit, the prosecutor said, and the firm continued trading foreign currency after it was ordered to stop.

Midland Euro is also under investigation by the U.S. Commodity Futures Trading Commission, Kramer said. He said several victims have filed civil lawsuits against the Leichners and the company.