October 11, 2011
CFTC Obtains Default Judgment against North Carolina Foreign Currency Firm Barki LLC in a $38 Million Ponzi Scheme
Consent Order Requires Relief Defendant Rhonda Kramer to Disgorge Assets
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that the U.S. District Court for the Western District of North Carolina entered an order of default judgment and permanent injunction against Barki, LLC of Mint Hill, N.C.
The order, entered on September 30, 2011, stems from a CFTC enforcement action filed on March 17, 2009 that charged Barki and Bruce C. Kramer (Kramer) with fraudulent solicitation and misappropriation in a $38 million leveraged foreign currency (forex) Ponzi scheme perpetrated by Kramer (see CFTC New Release 5635-09, March 18, 2009).
The court’s order imposes restitution of $19,960,649 and a civil monetary penalty of $20,944,707 on Barki and imposes permanent trading and registration bans against Barki, among other sanctions. The order also requires relief defendant Forest Glen Farm, LLC of North Carolina, a company Kramer registered to purchase his residence and a horse farm, to disgorge $1.35 million in ill-gotten gains it received as a result of Kramer’s fraudulent conduct.
In addition, the CFTC obtained a federal court consent order from the same court requiring disgorgement from relief defendant Rhonda Kramer (R. Kramer) for any customer funds she obtained through Kramer’s fraudulent conduct. The consent order, entered on September 27, 2011, recognizes that the Receiver appointed by the court in this case had collected funds from R. Kramer which satisfies her disgorgement obligations under the consent order.
The Default Order Finds that Kramer Fraudulently Solicited Least $38 Million from 79 Customers by Touting his Success in Trading Forex
The default order finds that, from June 2004 through February 2009, Kramer fraudulently solicited at least $38 million from 79 customers by touting his success in trading forex. Of the $38 million solicited, Kramer deposited approximately $17.5 million for trading forex and sustained trading losses of $10 million, the order finds. Kramer used the bulk of the funds to pay purported profits and to return principal to customers, and for extravagant personal uses, such as a 48-acre horse farm, a 6,000 square foot residence, artwork, luxury automobiles including a Maserati, and extravagant parties, the order finds. Kramer concealed his fraud by issuing false account statements to customers. His fraud became known upon his death in February 2009.
Joseph W. Grier, III was appointed Receiver in this action and has distributed $3,250,369 in receivership funds to Barki customers. Barki customers with questions or concerns about the status of the Barki Receivership should direct their inquiries to:
101 North Tryon Street, Suite 1240
Charlotte, NC 28246
The CFTC thanks the Federal Bureau of Investigation, Charlotte Division, and the National Futures Association for their assistance.
CFTC Division of Enforcement staff members responsible for this case are Anne M. Termine, Maura Viehmeyer, Stephen Tsai, Rishi K. Gupta, Michelle Bougas, Gretchen L. Lowe, and Vincent A. McGonagle.
Last Updated: October 11, 2011