Release Number 7100-15
January 12, 2015
Federal Court in Florida Enters Order Freezing Assets in CFTC Foreign Currency Anti-Fraud Action against Allied Markets LLC and its Principals Joshua Gilliland and Chawalit Wongkhiao
CFTC Charges Jacksonville, Florida, Defendants with Operating a Fraudulent Forex Pool and Misappropriating Customer Funds to Pay Personal Expenses
Washington, DC — The U.S. Commodity Futures Trading Commission (CFTC) today announced that it filed a civil enforcement Complaint in the U.S. District Court for the Middle District of Florida, charging Defendants Allied Markets LLC, and its principals Joshua Gilliland and Chawalit Wongkhiao, all of Jacksonville, Florida, with operating a fraudulent foreign currency (forex) commodity pool in violation of the Commodity Exchange Act (CEA) and CFTC Regulations. In addition, none of the Defendants has ever been registered with the CFTC, as required.
On January 7, 2015, the day after the CFTC Complaint was filed under seal, U.S. District Judge Marcia Morales Howard issued an emergency Order freezing and preserving assets under the Defendants’ control and prohibiting them from destroying documents or denying CFTC staff access to their books and records. The Court has scheduled a hearing for January 21, 2015, on the CFTC’s motion for a preliminary injunction.
The CFTC Complaint charges that, as early as January 2012, the Defendants fraudulently solicited more than $1 million from members of the public to trade forex in a commodity pool. As alleged, Defendants Gilliland and Wongkhiao misappropriated funds to pay their personal expenses. For example, instead of trading forex as promised, they allegedly withdrew approximately $850,000 in pool participant funds from the Allied Markets forex account, spending more than $64,000 of the stolen funds on restaurants and entertainment; approximately $33,000 on travel, hotels and rental cars; and approximately $66,000 on rent for their residence in Jacksonville Beach, Florida. They also transferred at least $83,200 to their personal bank accounts and withdrew approximately $139,000 in cash from automated teller machines and at bank branches, the Complaint charges.
Defendants also used pool participant funds to pay purported trading profits and supposedly returned pool participants’ principal in the manner of a Ponzi scheme, according to the Complaint.
Specifically, according to the Complaint, the Defendants solicited members of the public to send them money for forex trading by fraudulently guaranteeing specific trading returns and by making material misrepresentations regarding their trading expertise and results, including that Defendants’ forex trading was generating large profits.
In its continuing litigation, the CFTC seeks full restitution to defrauded pool participants, disgorgement of any ill-gotten gains, a civil monetary penalty, permanent registration and trading bans, and a permanent injunction against future violations of the CEA and CFTC Regulations, as charged.
The CFTC appreciates the assistance of the Jacksonville Beach Police Department, the Jacksonville Sheriff’s Office, the Florida Office of Financial Regulation, the United States Marshals Service, and the National Futures Association.
CFTC Division of Enforcement staff members responsible for this action are Jonah McCarthy, Patricia Gomersall, Dmitriy Vilenskiy, Jonathan Robell, John Einstman, and Paul Hayeck.
(See Complaint and Asset Freeze Order under Related Links.)
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CFTC’s Foreign Currency (Forex) Fraud and Commodity Pool Fraud Advisories
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Foreign Currency Trading (Forex) Fraud Advisory, which states that the CFTC has witnessed a sharp rise in Forex trading scams in recent years and helps customers identify this potential fraud.
The CFTC has also issued a Commodity Pool Fraud Advisory, which warns customers about a type of fraud that involves individuals and firms, often unregistered, offering investments in commodity pools.
Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.
Last Updated: January 12, 2015