Press Release: 5659-09
For Release: May 21, 2009
CFTC Charges Florida Resident Michael J. Riolo and His Two Companies with Fraud in Alleged Multi-Million Dollar Foreign Currency Scam
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today charged Michael J. Riolo of Boca Raton, Florida, and two companies he controls and owns, LaSalle International Clearing Corporation and Sterling Wentworth Currency Group, Inc., with fraudulently soliciting and receiving funds from members of the general public in an off-exchange foreign currency (forex) scam and providing their customers with false account statements.
The CFTC complaint filed May 21, 2009, in the U.S. District Court for the Southern District of Florida, Fort Lauderdale Division, alleges that the defendants, from at least June 18, 2008, to the present, failed to disclose to customers that they were the counterparties in each forex transaction entered on behalf of their customers, that they owed millions of dollars to customers, and that they lacked the funds to make these payments as well as any payments for prospective profits.
The complaint also alleges that the defendants sent monthly statements to customers depicting the month-end value for each customer’s account, without disclosing to customers that defendants lacked sufficient cash to pay to customers the purported value of their accounts. The complaint further alleges that these account statements were false since the defendants expressly overstated the total cash available, in some instances by as much as $24.5 million.
According to Stephen J. Obie, CFTC Acting Director of Enforcement, “The CFTC continues to devote substantial enforcement resources to bring to justice Ponzi schemesters who mercilessly steal from those who oftentimes cannot afford to lose their investment. The CFTC is committed to using every means to end the Ponzi-liferation of schemes that have been detected and exposed thus far so that wrongdoers are severely punished and others are deterred from pursuing a life of criminality. We have seen an avalanche of Ponzi cases and have thus far in 2009 filed 23 such cases, and I expect more to be forthcoming.”
In the complaint, the CFTC seeks a preliminary injunction freezing defendants’ assets, restitution, disgorgement of ill-gotten gains, civil monetary penalties, the appointment of a temporary receiver, and a permanent injunction, as well as other relief.
The CFTC wishes to thank the Federal Bureau of Investigation, the United States Attorney’s Office for the Southern District of Florida, and the State of Florida Office of Financial Regulation for their assistance in this matter.
The following CFTC staff members are responsible for this case: Joseph Rosenberg, Steven Ringer, Philip Rix, Lenel Hickson and Vincent McGonagle, from the Division of Enforcement, and William Tylinski, from the Division of Clearing and Intermediary Oversight. In addition, Yeongil Park, a visiting Investigator from the Korean Financial Supervisory Service, assisted in this matter.
Last Updated: May 21, 2009