FEDERAL COURT ORDERS TWO FLORIDA MEN TO REPAY $300,000 EACH TO CUSTOMERS THEY DEFRAUDED IN A FOREIGN CURRENCY SCAM
WASHINGTON – The U.S. Commodity Futures Trading Commission (CFTC) announced today that the United States District Court for the Southern District of Florida, Miami Division, issued an order imposing permanent injunctions against defendants Frank DeSantis and Erin Valko of Lighthouse Point, Florida, and Christopher Boutchie of Pompano Beach, Florida, and requiring DeSantis and Boutchie each to repay injured customers $300,000.
The consent order, entered on January 20, 2004 by the Honorable Patricia A. Seitz, settles CFTC charges against DeSantis, Valko, and Boutchie arising out of the CFTC’s complaint in CFTC v. World Banks Foreign Currency Traders, Inc., et al., 01 CV 7402 filed on August 23, 2001, which charged the defendants with fraudulent telemarketing of illegal foreign currency (forex) options. The complaint charged that the defendants lured customers with false claims that forex investments offered extraordinary profits with little risk (see CFTC News Release 4563-01, August 28, 2001).
According to the complaint, the defendants solicited customers to invest in purported forex investments, by claiming that because of falling interest rates, a weakening U.S. dollar, or other market news, the value of the Euro or Japanese Yen was poised to skyrocket, which would allow quick-acting customers to make huge profits in a matter of weeks or months through the purchase of foreign currency options. At the same time, the complaint alleged, defendants drastically downplayed the potential risk of loss by promising to use their years of expertise to watch the market closely and alert customers to get out of the market at the right time.
The complaint further alleged that when a customer hesitated, telemarketers pursued the sale through a barrage of calls – three times in an hour, according to one sworn statement filed by the CFTC. Once a customer decided to invest, the complaint alleged, telemarketers continued their high-pressure tactics by sending account opening documents by fax and FedEx. The CFTC further alleged that defendants became evasive or unavailable to customers once customers started inquiring about their investments.
DeSantis and Boutchie Each to Repay $300,000 to Defrauded Customers
The court's order requires that DeSantis and Boutchie each repay $300,000 to defrauded customers, and enjoins and permanently prohibits all three defendants from engaging in transactions that operate as a fraud upon commodity pool participants or prospective participants, as well as from applying for registration with the CFTC in any capacity.
The defendants consented to the entry of the order without admitting or denying the allegations in the complaint or the findings in the consent orders.
Charges against the other defendants in the case: World Banks Foreign Currency Traders, Inc. and International Investors Trading Group, Inc., both Florida corporations; Daniel T. Ledoux of Jupiter, Florida; and Gavin Livoti and Bryant Crowder of Boca Raton, Florida, remain pending.
The following CFTC Division of Enforcement staff were responsible for this action: Robert Hildum, Mary Kaminski, Timothy Mulreany, and Paul Hayeck.
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