U.S. COMMODITY FUTURES TRADING COMMISSION AND OTHER FEDERAL AUTHORITIES COOPERATE TO SHUT DOWN NEW YORK FOREIGN CURRENCY (FOREX) BOILER ROOM OPERATION
CFTC CHARGES RICHMOND GLOBAL ENTITIES OF STATEN ISLAND, NEW YORK AND FOUR INDIVIDUALS WITH DEFRAUDING 160 CUSTOMERS OF MILLIONS OF DOLLARS IN FOREX SCHEME
CFTC Assisted U.S. Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation
WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that it filed a complaint in federal district court against defendants Richmond Global Associates, LLC; Richmond Global Director LLC; Richmond Global MCA, LLC; Richmond Global Managed Account, LLC; Richmond Global, Ltd.; and RG Group Holdings, LLC (collectively, Richmond Global Entities), as well as Vincenzo Danio, Joseph Pappalardo, Ronald Turner and Miron Vinokur, all of Staten Island, New York, for allegedly defrauding customers in the solicitation and trading of forex contracts that were in fact futures contracts.
On the same day the complaint was filed, U.S. District Court Judge Shira Scheindlin of the Southern District of New York issued a restraining order freezing the assets of the Richmond Global Entities, Danio, Pappalardo, Turner, and Vinokur. The restraining order also prohibits the defendants from destroying documents. The filing was the result of coordinated investigations by the CFTC and federal criminal authorities that led to the arrests yesterday of the individual defendants in this case.
The complaint alleges that, starting in December 2001, the defendants fraudulently solicited at least $3.5 million dollars from at least 160 retail customers for the purpose of trading forex contracts. The complaint further alleges that during these solicitations, the defendants made false promises of high returns, failed to disclose hidden commission charges, issued account statements that falsely characterized the undisclosed commissions as trading losses, made false representations regarding the risk of forex trading as well as their experience and past performance in trading forex, and misappropriated customer funds.
In the ongoing litigation, the CFTC is seeking preliminary and permanent injunctive relief, a return of funds to defrauded customers, monetary penalties, and repayment of ill-gotten gains.
The CFTC’s injunctive action is the result of a cooperative civil and criminal investigation by the CFTC, the U.S. Attorney’s Office for the Southern District of New York, and the Federal Bureau of Investigation.
CFTC Acting Chairman Sharon Brown-Hruska stated:
“As demonstrated by today’s filing, one of the objectives of the Commission remains the vigorous prosecution of retail forex fraud. Our Division of Enforcement will continue to use the tools in our statute to prove that fraudsters like those charged today are engaging in illegal acts. I applaud the efforts of the Commission’s enforcement staff in bringing today’s action, as well as the law enforcement officers of the FBI and the U.S. Attorney’s Office, with whom they have cooperated closely.”
Gregory Mocek, CFTC Enforcement Director stated:
“The rampant proliferation of forex boiler rooms that prey on unsuspecting Americans is a focus of the CFTC’s enforcement program. Whenever possible, we will partner with criminal authorities to eliminate this unscrupulous activity and protect market participants who fall victim to these schemes.”
The following Commission staff members are responsible for this case: Michael Berlowitz, Ronald Carletta, Angelina Guiriba, Sheila Marhamati, Michael C. McLaughlin, Karin N. Roth, Philip Rix, David W. MacGregor, Steven Ringer, Lenel Hickson, Jr., Stephen J. Obie, and Richard Wagner.
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