For Release: January 18, 2007
Foreign Currency Company, UForex Consulting, its President, and Former Employee Charged in Louisiana Federal Court with Cheating Customers of More Than $2.9 Million
CFTC Obtains Federal Court Orders Freezing Assets and Preventing the Destruction of Books and Records of Defendants
Washington, D.C.— The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of a complaint in the U.S. District Court for the Western District of Louisiana against UForex Consulting, LLC, (UForex) of Sunny Isles Beach, Florida, Paulo Correa (also known as Paul Karr) of North Miami Beach, Florida, and Mario Garcia of Hialeah, Florida. The defendants allegedly transacted business in Louisiana and defrauded at least 20 Louisiana residents in the New Iberia and surrounding areas.
On January 9, 2007, the Honorable Rebecca F. Doherty, U.S. District Judge, issued a restraining order prohibiting the defendants from destroying documents or denying CFTC staff access to books and records. It also freezes the assets of all the defendants.
UForex, which has never been registered with the CFTC or designated as a contract market for the trading of foreign currency (forex) futures, purported to have its corporate headquarters in Charleston, South Carolina; Nevis; and Nassau, Bahamas. Correa held himself out as the company’s sole trader.
The CFTC complaint alleges that, from January 2002 through at least November 2004, Correa (individually, doing business as, and as the controlling person of UForex) and Garcia fraudulently solicited and accepted more than $3.7 million from at least 127 retail customers for the purported purpose of trading over-the-counter forex contracts that purportedly cleared through yet another company controlled by Correa.
Specifically, as alleged, Correa’s and Garcia’s sales pitches touted historical returns of between 5% and 10% per month and promised high profits with limited or no risk. According to the complaint, for months, UForex sent customers monthly account statements that falsely reported that their accounts were profitable. However, in October 2004, UForex sent customers statements, accompanied by a letter from Correa, informing them that most of the funds were lost trading foreign currencies. Based on the October 2004 statements, UForex customers in aggregate lost approximately 70% – or $2.9 million – of their investment. Additionally, as alleged, Correa misappropriated at least $2 million of the customers’ funds for his personal use.
Gregory Mocek, the CFTC’s Director of Enforcement, stated:
“This action is part of our continuous pursuit of forex fraud around the country. Unfortunately for Louisiana, this forex scam has victims who live in the heart of Acadiana. Those who employ the complexities of forex trading to dupe even the most savvy retail investors are on notice that elaborate scams will not prevent us from aggressively pursuing and exposing those who violate the Commodity Exchange Act. Over the last five years, we have filed ninety-five forex actions that involved over 25,000 victims.”
In its ongoing litigation in this action, the CFTC seeks orders of preliminary and permanent injunction against the defendants, a return of alleged ill-gotten gains, repayments to defrauded investors, monetary penalties, among other relief.
The CFTC appreciates the assistance of Iberia Parish Assistant District Attorney Ralph K. Lee, Jr. and the Lafayette division of the U.S. Attorney’s Office for the Western District of Louisiana.
The following CFTC Division of Enforcement staff members are responsible for this case: Susan J. Gradman, Judith S. McCorkle, Cynthia Cannon, Venice Bickham, Tom Koprowski, Scott R. Williamson, Rosemary Hollinger, and Richard B. Wagner.
Last Updated: April 6, 2007