March 26, 2012
Federal Court in Puerto Rico Orders Angel F. Collazo and ACJ Capital, Inc. to Pay over $3.7 Million for Solicitation Fraud and Issuing False Statements in an Off-Exchange Foreign Currency Scheme
Collazo also pled guilty to related criminal charges
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that it obtained a federal court consent order requiring defendants Angel F. Collazo (Collazo), of Salinas, Puerto Rico, and his company, ACJ Capital, Inc. (ACJ), jointly and severally to pay $1,544,252 of restitution, to disgorge $550,590 of ill-gotten gains, and to pay a $1,666,770 civil monetary penalty for fraudulently soliciting customers to trade off-exchange leveraged foreign currency (forex) contracts and issuing false statements to conceal trading losses.
The consent order of permanent injunction, entered March 23, 2012, by Judge Jose A. Fuste of the U.S. District Court for the District of Puerto Rico, stems from a CFTC complaint filed on May 4, 2011, that charged the defendants with operating a forex fraud scheme (see CFTC Press Release 6039-11). The order also permanently prohibits Collazo and ACJ from trading on any CFTC registered entity and from engaging in certain commodity-related activities, including controlling or directing trading, or soliciting, receiving or accepting funds for transactions involving commodity futures, options on futures, commodity options, security futures products, or forex.
The order finds that Collazo and ACJ fraudulently solicited customers to trade forex through accounts managed by Collazo and that, in soliciting customers, Collazo falsely claimed that ACJ’s trading program was profitable, created the false impression that ACJ was a successful and experienced forex firm, and minimized and failed to fully disclose the risks of trading leveraged forex. The order finds that Collazo’s trading on behalf of his customers resulted in consistent losses.
The order also finds that Collazo misled customers about the performance of their investments and assured customers that their investments were performing well, despite the losses. According to the order, Collazo created and sent customers false trading statements that concealed the extent of losses in their accounts. In addition, when ACJ’s customers noticed that their accounts appeared to show losses, Collazo falsely told them that their online account statements were inaccurate due to a computer malfunction, assured them that he had access to their “true” account balances, and sent them false account statements that reflected positive ending balances, the order finds.
On December 13, 2011, Collazo pled guilty to wire fraud and money laundering charges in a related criminal action (USA v. Collazo-Godineaux, 3:11-cr-00173-GAG). His sentencing is currently scheduled for June 4, 2012.
The CFTC appreciates the assistance of U.S. Attorney’s Office of the District of Puerto Rico and the United Kingdom Financial Services Authority in this matter.
CFTC Division of Enforcement staff responsible for this case are Kara Mucha, Jeremy Christianson, Michelle Bougas, James A. Garcia, Michael Solinsky, Gretchen L. Lowe, and Vincent A. McGonagle.
Last Updated: March 26, 2012