Release Number 8217-20
CFTC Obtains $3.8 Million Fraud Judgment Against Commodity Pool Operator and its Owner
June 23, 2020
Related Criminal Action
tarting in at least August 2016, defendants fraudulently solicited and misappropriated money from at least 30 individuals for pooled trading in retail foreign exchange (forex). In addition, between August 2016 and September 2018, the defendants received at least $1.1 million from pool participants for commodity pools that would purportedly trade forex. However, the defendants never traded forex on behalf of pool participants, but instead misappropriated the majority of funds to pay Carducci’s personal expenses and to support his lavish lifestyle. Defendants concealed the fraud by issuing false account statements to participants.
In order to entice potential participants to deposit funds with them, the defendants falsely represented that, among other things, they had a history of making large profits from trading forex and they maintained a forex trading account with a registered foreign exchange dealer that held $12 million under defendants’ management. The defendants also falsely asserted that that they would trade forex on behalf of pool participants that would yield profits of up to 18% per month without suffering any losses.
Additionally, the defendants falsely claimed that pool participants could withdraw their funds upon request. In actuality, they ignored pool participants’ withdrawal requests and lied about the conditions that purportedly prevented the return of participants’ funds. The defendants also sent
The CFTC appreciates the assistance of the U.S. Attorney’s Office for the District of South Carolina in this matter.
CFTC’s Commodity Pool Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories, including the Commodity Pool Fraud Advisory, which warns customers about a type of fraud involving individuals and firms, often unregistered, offering investments in commodity pools.
The CFTC also strongly urges the public to verify a company’s registration with the CFTC before committing funds. If unregistered, a customer should be wary of providing funds to that entity. A company’s registration status can be found using NFA BASIC.
Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.