ROFX and individual defendants were ordered to pay over $56 million in restitution to defrauded customers and a $169,086,837 civil monetary penalty.
A Miami federal court has ordered ROFX and co-defendants Jase Davis, Borys Konovalenko, Anna Shymko, and Alla Skala, to pay jointly and severally over $56 million in restitution to defrauded customers and a $169,086,837 civil monetary penalty.
The default judgment order stems from the CFTC’s August 31, 2022 amended complaint charging the nine defendants and defendant Timothy F. Stubbs with fraud, misappropriation, and registration violations in connection with a fraudulent FX scheme.
ROFX misappropriated over $57 million
According to the CFTC, ROFX’s fraud involved forex transactions which resulted in the misappropriation of over $57 million of customer funds.
Timothy F. Stubbs, a certified public accountant, was ordered to pay a $314,000 civil monetary penalty and $153,000 in restitution. He was found to have accepted and misappropriated customer funds intended for forex trading.
From January 2018 through September 2021, ROFX.net was used to fraudulently solicit and misappropriate at least $57.5 million from U.S. and international customers for purported trading in forex.
ROFX falsely claimed to trade forex utilizing a highly successful automated trading robot with guaranteed coverage of losses. Customer funds were wired to offshore entities with no connection to forex trading. The defendants also acted as futures commission merchants by doing business as ROFX, soliciting or accepting orders for retail forex transactions via the ROFX website, and accepting funds in or in connection with such transactions without being registered with the CFTC.
In September 2021, dozens of victims took ROFX and its founders to court over the fraud. At the time, there were letters from 300 victims in support of forming a class action.
CFTC won $2.1 million case against Erik J. Hass’s Simply Gains
A recent lawsuit brought by the CFTC resulted in a consent order against Erik J. Hass and Simply Gains, Inc. after fraudulently soliciting millions for forex trading without the necessary registration as mandated by the Commodity Exchange Act. Simply Gains, Inc. solicited at least $2.1 million from at least 21 individuals to fund their Forex commodity pool operation.
Despite assurances that depositors could not lose more than 20% of the funds they deposited, the defendants lost over $1 million trading forex and misappropriated at least $415,000 more to spend on Hass’s mortgage, credit card debt, and a Caribbean cruise.
Hass admitted his guilt in a related criminal case, committing to full restitution to those defrauded. In addition to acknowledging the restitution, the court mandated an $830,000 civil penalty against the defendants.
