For Release: January 23, 2003
FLORIDA FIRM, INVESTORS FREEDOM CLUB, L.C. AND OTHERS, CHARGED WITH SOLICITING OVER $1.5 MILLION FROM CUSTOMERS IN FOREIGN CURRENCY (FOREX) FUTURES FRAUD
Government Obtains Federal Court Order Freezing Assets of Defendants Investors Freedom Club, L.C.; William Folino; George Belanger; and Relief Defendant Tina Folino
WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that on January 13, 2003, a federal court in Tampa, Florida, issued an order freezing the assets and preserving the books and records of defendants Investors Freedom Club, L.C. (IFC), William A. Folino, George Belanger (also collectively known as Venture Freedom Fund, LTD. or Venture Freedom Foundation), and relief defendant Tina N. Folino.
The court’s order followed the filing of a complaint under seal by the CFTC charging the defendants with defrauding members of the retail public in soliciting customers to invest in illegal, off-exchange foreign currency (FOREX) futures contracts. The complaint also charged defendants IFC and Folino with misappropriating hundreds of thousands of dollars of customer funds. The court lifted the seal on January 22, 2003.
According to the complaint, defendant William Folino is the Chief Investment Officer of IFC, a Clearwater, Florida business, and defendant George Belanger allegedly solicited IFC customers and managed the daily operations of the IFC website. Relief defendant Tina Folino, William Folino’s wife, is not charged with any wrongdoing but is named as a person who received proceeds from the alleged fraud.
Specifically, the CFTC complaint alleges that, between at least January 2001 and October 2002, defendants successfully and illegally solicited more than $1.5 million from approximately 150 customers for investment in FOREX futures contracts. According to the complaint, defendants IFC and Folino falsely represented to potential customers that they would receive consistent profits with annual yields as high as 100 percent with little or no risk of loss. The complaint also alleges that defendants represented to customers that their funds were safely held through a “CD or secured instrument from top AAA- [and] AA-rated banks.” According to the complaint, however, defendant Folino, instead, misappropriated more than half the funds raised from customers and used them for personal goods or services for himself and his family, and diverted other funds to accounts his family controlled.
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 or triple the monetary gain to defendants, whichever is greater, for each violation of the Commodity Exchange Act. The court has not set a date for the preliminary injunction hearing.
The following Division of Enforcement staff are responsible for this case: Paul G. Hayeck, Peter M. Haas, Christine M. Ryall, and Erin Powell.
A copy of the CFTC complaint and restraining order may be obtained at www.cftc.gov.
Paul G. Hayeck
CFTC Division of Enforcement
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A Consumer Advisory Warning the Public of the Risks of Foreign Currency Trading and Foreign Currency (FOREX) Scams Is Available on the CFTC’s Website
Investors seeking information on FOREX investments should review the CFTC’s Consumer Advisory on Foreign Currency Fraud (at www.cftc.gov/cftc/cftccustomer.htm), which lists warning signs of FOREX scams and urges the public to scrutinize claims of high-return, low-risk investment opportunities in foreign currency trading. The CFTC has also issued two Advisories on how FOREX firms may lawfully offer foreign currency futures and options trading opportunities to the retail public (see CFTC Press Release 4625-02, March 21, 2002, CFTC Advisory, March 21, 2002, and CFTC Advisory 06-01, February 5, 2001).
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