The Commodity Futures Trading Commission (CFTC) today announced that the U.S. District Court for the Central District of California, Western Division, entered an order which granted the CFTC’s motion for default judgment (Order) and a judgment consistent with the Order (Judgment) against defendants Jin Choi (Choi), a citizen of the Republic of South Korea with a last known residence in Los Angeles, California, as well as his companies Apuro Holdings Ltd (Apuro) d/b/a, ApuroFX, JCI Holdings USA (JCI), and d/b/a JCI Trading Group, LLC (collectively the defendants), in connection with a fraudulent foreign currency (forex) scheme that victimized customers in the United States, Australia, Indonesia, and elsewhere.
The Judgment, entered on March 5, 2019 by the Honorable Dolly M. Gee, requires the defendants, jointly and severally, to pay restitution of $1,121,672 to defrauded customers and a civil monetary penalty of $1,121,672. The Judgment also imposes permanent trading and registration bans against Defendants and prohibits them from violating provisions of the Commodity Exchange Act and CFTC regulations, as charged in the Complaint filed on May 14, 2018. (see CFTC Complaint and Press Release 7733-18).
The Order finds that, from January 2014 to the present, the defendants fraudulently solicited and accepted at least $1,145,672 from fourteen individuals (customers) for the purported purpose of trading off-exchange margined or leveraged retail forex contracts on their behalf. According to the Order, the defendants never used customer funds for trading as they represented. Instead, the Order finds that the defendants misappropriated all of the customer funds to support Choi’s lavish lifestyle and to return approximately $24,000 to certain customers as purported “profits” in the manner of a “Ponzi” scheme, all while falsely representing that they were profitably trading on customers’ behalf.
The Order also finds that as part of their solicitations, the defendants made material misrepresentations, including that annual returns of 20%-50% would be paid out to customers on a quarterly basis and that Apuro was registered with the CFTC as a futures commission merchant, among other material misrepresentations and omissions. In fact, the Order further finds, Apuro and JCI were acting as unregistered commodity trading advisors (CTAs) and that Choi was acting as an unregistered associated person of the CTAs.
The CFTC cautions that orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers to ensure the wrongdoers are held accountable.
CFTC Division of Enforcement staff members responsible for this case are Danielle Karst, Timothy J. Mulreany, George H. Malas, Anthony Homer, and Paul G. Hayeck.
* * * * *
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.
Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.