For Release: June 10, 2002
FLORIDA, LOUISIANA AND GEORGIA FIRMS CHARGED WITH FRAUDULENTLY SOLICITING OVER $1,000,000 FROM CUSTOMERS TO INVEST IN ILLEGAL FOREIGN CURRENCY (FOREX) OPTION CONTRACTS
Government Obtains Federal Court Order Freezing Assets of 19 Individuals and Companies; Related Action Also Filed by Louisiana Attorney General
WASHINGTON, D.C. – The Commodity Futures Trading Commission (CFTC) announced today the filing of an action in federal court in Florida against Offshore Financial Consultants (Florida and Georgia) of Coconut Creek, Florida, and Atlanta, Georgia, respectively; Global Financial Consultants of Kenner, Louisiana; International Currency Merchants of Norcross, Georgia;and Thomas Destasio, Juan Carlos Gomez, William Augello, Elaine Kazanas, and Marshall Sheldon, who are all believed to reside in South Florida. The CFTC action charges the defendants with the fraudulent and illegal offering of in foreign currency (FOREX) option contracts to retail investors. The CFTC also charges that ten other individuals and entities are relief defendants who received the ill-gotten gains of the defendants and should be required to return those funds.
On June 5, 2002, the Honorable William P. Dimitrouleas of the United States District Court for the Southern District of Florida issued an order freezing the assets of the defendants and relief defendants and prohibiting the destruction of documents. The case will proceed before the Honorable Wilkie D. Ferguson, Jr.
The CFTC complaint, filed on June 4, 2002, alleges that, since at least April 2001, the defendants used a series of companies (“the Offshore Common Enterprise companies”) to defraud investors in the solicitation and sale of FOREX option contracts. The Offshore Common Enterprise companies each allegedly operates for only a few months, closes and then reappears in a new location under a new name. According to the complaint, its latest incarnation is Global, which is operating out of Louisiana and has solicited over $500,000 since February 2002. The CFTC alleges that while defendants were promising extraordinary profits, in some instances double and triple returns or more, they were actually engaged in the trading of illegal, off-exchange options contracts.
The CFTC’s Division of Enforcement Director, Gregory Mocek, said:
For over 14 months, these defendants have played cat and mouse with investors and the regulators by opening a company, operating for a few months, closing it, then opening a new company in a different place under a different name. Left in their wake are hundreds of individuals who were duped out of over one million dollars by defendants’ false claims about investment opportunities in foreign currency options. Through this action, the Division shows that you can run but you can’t hide from the Commission’s authority to protect the public from fraud.
In its continuing litigation, the CFTC is seeking preliminary and permanent injunctive relief, restitution for customers, disgorgement of ill-gotten gains, and civil monetary penalties of up to $120,000 for each violation of the Commodity Exchange Act, or triple the monetary gain to defendants, whichever is greater.
In a related action, the Louisiana Attorney General announced the filing of an action in the Jefferson Parish against Global Financial Consultants, Elaine Kazanas, and Stephen DeLong. Further information concerning the Louisiana Attorney General action can be obtained from Allen Pursnell at (225) 339-5139.
The Commission appreciates the assistance of the Louisiana Attorney General and the Florida Comptroller’s office among others in the Commission’s investigation and prosecution of this matter.
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Over the past year, the CFTC has brought 12 other enforcement actions alleging the
sale of illegal foreign currency futures and options (see CFTC News Releases
4636-02, May 2, 2002,
4611-02, February 27, 2002;
4513-01, May 2, 2001;
4528-01, June 20, 2001;
4551-01, August 14, 2001; and
4563-01, August 28, 2001).
Investors seeking information on FOREX investments should review the CFTC’s Consumer Advisory on Foreign Currency
Fraud listing warning signs of FOREX scams. The CFTC also has issued two
Advisories on how FOREX firms may lawfully offer foreign currency
futures and options trading opportunities to the retail public (see CFTC Advisory
06-01, February 5, 2001;
CFTC Press Release 4625-02,
March 21, 2002; and CFTC Advisory,
March 21, 2002).
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The following Division of Enforcement staff members are responsible for this case: Vincent McGonagle, Lael Campbell, Mary Kaminski, Karon Powell, Charles Ricci and Michael Lee.
A copy of the CFTC complaint and restraining order may be obtained at www.cftc.gov.
Acting Associate Director
CFTC Division of Enforcement
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