Release Number 5336-07

Release: 5336-07

For Release: May 17, 2007

New York Court Enters Order Imposing More than $2,000,000 in Monetary and Other Sanctions against Joseph Pappalardo, Ronald Turner, and Miron Vinokur in a Foreign Currency (Forex) Scam

Washington, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced that U.S. District Court Judge Shira A. Scheindlin in the Southern District of New York entered an order imposing monetary sanctions and a permanent injunction against defendants Joseph Pappalardo, Ronald Turner, and Miron Vinokur, all of Staten Island, New York, for violating the anti-fraud provisions of the Commodity Exchange Act by operating a foreign currency (forex) boiler room operation.

The order, entered on April 24, 2007, grants the CFTC’s motion for summary judgment against Pappalardo, Turner, and Vinokur. The order requires Vinokur to make restitution to defrauded investors totaling $270,393, and requires that Pappalardo and Turner are jointly responsible to make restitution payments totaling $1,527,800.

In addition, the defendants are required to disgorge ill-gotten gains, with Vinokur required to disgorge $23,300; Pappalardo, $79,300; and Turner, $116,300. The order also imposes a civil monetary penalty of $120,000 against Vinokur, and Pappalardo and Turner are ordered to pay penalties of $240,000 each.

The order stems from a complaint filed in February 2005 (see CFTC News Release, 5050-05, February 18, 2005). The complaint alleged that since December 2001 the defendants fraudulently solicited investments from at least 160 retail customers in forex contracts. 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.

The CFTC would like to thank the U.S. Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation for their assistance.

The following CFTC staff members are responsible for this case: Karin N. Roth, David W. MacGregor, Lenel Hickson, Jr., Stephen J. Obie, and Vincent McGonagle.

Media Contacts
Ianthe Zabel

Dennis Holden

Last Updated: May 18, 2007