Release Number 8415-21
CFTC Charges Unregistered Michigan Forex Firm and its Owner with Fraud and Misappropriation
August 17, 2021
Washington, D.C. — The Commodity Futures Trading Commission has filed a civil enforcement action in the Eastern District of Michigan against Ali Bazzi and his company Welther Oaks, LLC, both of Michigan, charging them with fraud and misappropriation in connection with their operation of a foreign currency (forex) commodity pool.
In its continuing litigation, the CFTC seeks disgorgement of ill-gotten gains, civil monetary penalties, restitution, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA), and CFTC regulations, as charged.
According to the complaint, starting in at least March 2018, Bazzi, the owner of Welther Oaks, fraudulently solicited at least $470,000 from at least 25 pool participants for a commodity pool that would purportedly trade forex. As alleged, in order to entice pool participants, Bazzi and Welther Oaks falsely represented that they had made large profits trading forex; and that pool participants would realize guaranteed profits as high as 15% per month on their funds without losses, and could withdraw their funds at any time. The complaint further alleges that Bazzi and Welther Oaks used only a small fraction of the funds they collected to trade forex and concealed their fraud by issuing false account statements to the pool participants that purported to show trading profits. In addition, the complaint alleges that defendants misappropriated at least $387,000 of participants’ funds to spend on automobiles, jewelry, retail purchases, meals and entertainment and travel for Bazzi.
Parallel Criminal Action
In a separate, parallel criminal action against Bazzi in the U.S. District Court for the Eastern District of Michigan (U.S. v. Bazzi, 2:21-cr-20348-DML-DRG), Bazzi entered a guilty plea on August 17, 2021.
The CFTC cautions that orders requiring payment of funds to victims may not result in the recovery of any money lost because wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
The CFTC appreciates the assistance of the U.S. Attorney’s Office for the Eastern District of Michigan and the FBI’s Detroit Field Office in this matter.
The Division of Enforcement staff members responsible for this case are Joseph J. Patrick, Jon J. Kramer, David A. Terrell, Scott R. Williamson, and Robert T. Howell.
CFTC’s Foreign Currency (Forex) Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Foreign Currency (Forex) Trading Fraud Advisory, to help customers identify these scams.
The CFTC also strongly urges the public to verify a company’s registration with the Commission 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), file a tip or complaint online, or contact the Whistleblower Office. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.