2 years ago
102 The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against Eshaq M. Nawabi and his companies Nawabi Enterprise and Hyperion Consulting Inc. for fraud and misappropriation related to an off-exchange Forex trading scheme.
The defendants have allegedly solicited funds totaling at least $543,000 from at least seven investors as part of the FX scam, according to the financial watchdog that oversees the foreign exchange space in the United States.
Since October 2019, Eshaq M. Nawabi solicited and pooled hundreds of thousands of dollars from at least seven pool participants for the purported purpose of trading forex.
Scam claimed profits between 8% and 25% per month
He was able to persuade these investors by claiming his companies had historically made large profits, between 8 to 25% per month, for themselves and pool participants from trading forex. In addition to such high-profit rates, the FX scheme said investors would be exposed to minimal risk and could withdraw their funds at any time.
Instead of trading pool participant funds as promised, the defendants misappropriated their money for Nawabi’s own personal benefit and paid other pool participants
In a classic Ponzi-like scheme, funds were misappropriated for Nawabi’s own personal benefit and to pay pool participants trading returns that did not exist as defendants created and issued false account statements, said the CFTC.
When clients requested to withdraw funds, Eshaq M. Nawabi would either ignore or provide bogus promises and excuses, or engaged in conduct designed to delay payouts, the complaint alleged.
Chief District Judge Kimberly J. Mueller entered a Statutory Restraining Order against the defendants, freezing their assets and permitting the CFTC immediate access to their books and records.
The CFTC seeks full restitution to the defrauded pool participants, disgorgement of any ill-gotten gains, a civil monetary penalty, permanent registration and trading bans, and a permanent injunction against the defendants.
Casper Mikkelsen and Abner Tinoco recently charged for Ponzi scams
In April, a New York court permanently banned Casper Mikkelsen from trading commodity interests and ordered him to pay $1,191,286 in restitution and a $3,573,860 penalty for a Forex fraud brought to court by the Commodity Futures Trading Commission.
The Danish citizen will have to pay triple the profits he made committing the scam, in he promised clients he would use his discretion to trade forex on their behalf through his firm, GNTFX.
In turn, his clients invested at least $1,536,782.47, but rather than using those funds for forex trading, Casper Mikkelsen misappropriated the funds in a typical Ponzi scheme, by paying purported forex trading profits to clients.
In late March, a US court ordered Abner Alejandro Tinoco and his company Kikit & Mess Investments, LLC, in another case of an FX and Crypto Ponzi scheme. The defendants fraudulently solicited at least $7.2 million from at least 322 clients, who intended to trade forex or cryptocurrency in managed accounts.
Not only he used the funds to pay bogus “investment profits” to clients in a manner akin to a Ponzi scheme, but Tinoco also used the monies to charter a private jet, purchase of a luxury mansion and another real estate, and purchase or lease luxury automobiles.
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