Federal Court Orders Defendant to Pay More Than $2.9 Million in Connection with a Social Media-Based Forex Fraud Scheme

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CFTC

Federal Court Orders Defendant to Pay More Than $2.9 Million in Connection with a Social Media-Based Forex Fraud Scheme

July 27, 2019

CFTC spoofing Forex Fraud SchemeWashington, DCThe Commodity Futures Trading Commission (CFTC) today announced that U.S. District Court for the Southern District of Texas entered judgment against defendant Kelvin Ramirez of Houston, Texas in a CFTC enforcement action that found that he had fraudulently solicited and misappropriated funds from clients in a forex fraud scheme.

The Court’s order requires Ramirez to pay $735,983.48 in restitution to defrauded clients and a civil monetary penalty of more than $2.2 million.  Additionally, the defendant is now permanently enjoined from engaging in conduct that violates the Commodity Exchange Act (CEA) and the regulations thereunder, and is permanently banned from registering with the CFTC and trading in any CFTC-regulated markets.

The court entered an order of default judgment and permanent injunction (Order) against the defendant following a CFTC Complaint filed on January 14, 2019. [See CFTC Press Release 7871-19]  In the Order, issued on July 12, 2019, Judge Keith P. Ellison found that the CFTC had sufficiently pled CEA violations by alleging that Ramirez fraudulently solicited more than 400 clients to (1) invest in commodity pools that purportedly trade in forex, (2) trade forex through accounts managed by Ramirez, and (3) subscribe to Ramirez’s forex trading education and signals service, then misappropriated the funds provided to him for these purposes.  Further, the court found that the defendant lured his clients primarily through social media—including Instagram, WhatsApp, and similar platforms—by touting his hundreds of thousands of dollars in weekly forex trading profits, a lavish lifestyle funded through his profits, his growing multi-million dollar personal bank balance, and a managed forex trading pool with millions of dollars in assets under management. The court found that all of these representations were false and that the defendant absconded with his clients’ money.  In total, Ramirez fraudulently solicited and misappropriated over $735,000.

The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets.  The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.

The CFTC thanks and acknowledges the assistance of the St. Vincent and the Grenadines Financial Services Authority.

The CFTC Division of Enforcement staff members responsible for this case are Daniel Jordan, Diana Dietrich, Michael Loconte, Erica Bodin, and Rick Glaser.     

CFTC’s Foreign Currency (Forex) Fraud Advisory

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Foreign Currency Trading (Forex) Fraud Advisory, which states that the CFTC has witnessed a sharp rise in Forex trading scams in recent years and helps customers identify this potential fraud.

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