The Commodities Futures Trading Commission (CFTC) filed suit against a multi-state scheme to defraud clients in off-exchange forex trading.
According to a statement released by the CFTC August 24, 2017:
The U.S. CFTC filed a civil enforcement action against Defendants Thomas Lanzana (d/b/a Unique Forex) currently of Pawleys Island, South Carolina and his company Blackbox Pulse, LLC of North Bergen, New Jersey, and Nikolay Masanko and his company White Cloud Mountain, LLC, both of St. Augustine, Florida, charging them with fraud in connection with soliciting customers for their foreign currency derivatives (forex) trading pools and other investments. The CFTC Complaint, filed on August 21, 2017, in the U.S. District Court for the District of New Jersey, also charges the Defendants with misappropriating customer funds and with registration violations. Lanzana resided at various times in Midland Park and New Bergen, New Jersey, until approximately 2015, according to the Complaint.
In conjunction with the complaint, U.S. District Court Judge Madeline Cox Arleo signed a statutory restraining Order freezing the Defendants’ assets and prohibiting the destruction or concealment of their books and records.
The CFTC argues that the defendants ran a Ponzi scheme using off-exchange forex trades.
From at least 2013 to the present, through social media, websites, and word of mouth, Lanzana marketed himself as a successful forex trader, and he fraudulently solicited and accepted at least $450,000 from at least fifteen customers for the purpose of trading forex at Blackbox Pulse or Unique Forex. He kept customers’ trust by emailing them account statements and links to YouTube videos showing forex trades that were never made, sending them tax documents reporting fake gains, and displaying on his websites monthly statements for Blackbox Pulse and Unique Forex accounts that did not exist. In reality, Lanzana did not use all of the customer funds he accepted to trade forex, but instead misappropriated a portion of those funds to pay other customers who requested the return of their funds, in the manner of a Ponzi scheme, and for Lanzana’s own personal use and benefit.
The complaint continued:
For example, Lanzana emailed at least one customer an undated account statement for a Blackbox Pulse account ending in 0272 at Lek Securities that showed a balance of $536,454.10. And on the Blackbox Pulse website, several customers were able to view similar account statements for a Blackbox Pulse account at Lek Securities, but with the account number appearing as “xxxxxx”; the statements for January 2017 show a balance of $538,987.36. In reality, neither Blackbox Pulse nor Lanzana has ever had an account at Lek Securities.
The CFTC asserted that all of these statements were false.
In its complaint, the CFTC noted that the company even produced fake accounts that purported to be trading at FXCM, a forex company with its own share of troubles:
Additionally, Lanzana made available to various forex customers purported statements for a Blackbox Pulse account at Forex Capital Markets LLC (“FXCM”), which was registered with the CFTC as a retail foreign exchange dealer until March 2017. These statements made it appear as though Blackbox Pulse traded an account worth hundreds of thousands of dollars at FXCM.
These accounts were also bogus, and FXCM cooperated with CFTC’s investigation into this scheme.
The CFTC reiterated its warning about the potential for fraud in forex trading.
The website affiliated with the scheme, bbpulse.com, remains active and an email sent to the website was left unanswered.