CFTC catches another Ponzi FX scam, worth over $543,000

Rick Steves

He was able to persuade these investors by claiming his companies had historically made large profits, between 8 to 25% per month.

The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against Eshaq M. Nawabi and his companies Nawabi Enterprise and Hyperion Consulting Inc. for fraud and misappropriation related to an off-exchange Forex trading scheme.

The defendants have allegedly solicited funds totaling at least $543,000 from at least seven investors as part of the FX scam, according to the financial watchdog that oversees the foreign exchange space in the United States.

Since October 2019, Eshaq M. Nawabi solicited and pooled hundreds of thousands of dollars from at least seven pool participants for the purported purpose of trading forex.

Scam claimed profits between 8% and 25% per month

He was able to persuade these investors by claiming his companies had historically made large profits, between 8 to 25% per month, for themselves and pool participants from trading forex. In addition to such high-profit rates, the FX scheme said investors would be exposed to minimal risk and could withdraw their funds at any time.

Instead of trading pool participant funds as promised, the defendants misappropriated their money for Nawabi’s own personal benefit and paid other pool participants

In a classic Ponzi-like scheme, funds were misappropriated for Nawabi’s own personal benefit and to pay pool participants trading returns that did not exist as defendants created and issued false account statements, said the CFTC.

When clients requested to withdraw funds, Eshaq M. Nawabi would either ignore or provide bogus promises and excuses, or engaged in conduct designed to delay payouts, the complaint alleged.

Chief District Judge Kimberly J. Mueller entered a Statutory Restraining Order against the defendants, freezing their assets and permitting the CFTC immediate access to their books and records.

The CFTC seeks full restitution to the defrauded pool participants, disgorgement of any ill-gotten gains, a civil monetary penalty, permanent registration and trading bans, and a permanent injunction against the defendants.

Casper Mikkelsen and Abner Tinoco recently charged for Ponzi scams

In April, a New York court permanently banned Casper Mikkelsen from trading commodity interests and ordered him to pay $1,191,286 in restitution and a $3,573,860 penalty for a Forex fraud brought to court by the Commodity Futures Trading Commission.

The Danish citizen will have to pay triple the profits he made committing the scam, in he promised clients he would use his discretion to trade forex on their behalf through his firm, GNTFX.

In turn, his clients invested at least $1,536,782.47, but rather than using those funds for forex trading, Casper Mikkelsen misappropriated the funds in a typical Ponzi scheme, by paying purported forex trading profits to clients.

In late March, a US court ordered Abner Alejandro Tinoco and his company Kikit & Mess Investments, LLC, in another case of an FX and Crypto Ponzi scheme. The defendants fraudulently solicited at least $7.2 million from at least 322 clients, who intended to trade forex or cryptocurrency in managed accounts.

Not only he used the funds to pay bogus “investment profits” to clients in a manner akin to a Ponzi scheme, but Tinoco also used the monies to charter a private jet, purchase of a luxury mansion and another real estate, and purchase or lease luxury automobiles.

Read this next

Digital Assets

Centralized exchanges are 10 times more popular than DEXs in Western Europe

Western European traders are found to prefer centralized exchanges over decentralized ones as CEX traffic outpaces DEXs by a factor of ten.

Market News

Stock Market Analysis: Is NVDA Losing Its Leadership?

Since the beginning of the week, the S&P 500 Index (US500) has seen a modest increase of about 0.58%, whereas NVDA’s share price has experienced a decline of approximately 3.8%. This recent divergence raises concerns among Nvidia stock investors — could it signify a loss of NVDA’s market leadership?

Industry News

ESG: Australian regulator wins first greenwashing court case against Vanguard

Vanguard admitted that a notable portion of the securities within both the Index and the Fund did not undergo the promised ESG scrutiny.

Fintech, Uncategorized

BitMEX integrates HALO from Solidus Labs for cross-market surveillance

““The recent approval of the Spot Bitcoin ETF has piqued the market’s interest. As a result of price volatility, the trading volumes for crypto derivatives have gone up substantially. HALO, with its advanced technology and crypto-native detection architecture, will enable BitMEX to smoothly and safely scale trade surveillance across its increased trading volumes and provide the necessary safeguards for new product launches.”

Reviews

IUX Broker Review

IUX, recently rebranded from IUX Markets, stands as a multi-asset Forex broker recognized for its regulatory compliance across various jurisdictions.

Industry News

Horizon Software rebrands to Horizon Trading Solutions

“Horizon Trading Solutions has seen accelerated global growth over the past year to meet the rising demand for our trading solutions and built-for-purpose technology offering. The choice to rebrand represents a key part of this development, while maintaining our heritage and history in the industry.”

Market News

USDJPY has surged to levels last witnessed in 2022. Should we consider opening a short position?

The recent resurgence of the US dollar has propelled USD/JPY to new heights, touching levels not seen since 2022. This surge comes against the backdrop of stable short-term yields and ongoing economic data that fails to signal a significant slowdown, prompting questions about the extent of current monetary easing measures.

Digital Assets

DED Trends on Twitter After Memecoin Snapshot Announcement

Polkadot-backed community coin #DED, made it to the trending charts on X, demonstrating community’s engagement and interest behind the memecoin. 

Digital Assets

BlockDAG Presale Nears $10 Million Amid Toncoin’s Momentum, Green Bitcoin’s Presale, and the Rise of Other Top Cryptos

This article will examine three top trending topics: Toncoin’s potential, Green Bitcoin’s innovative presale, and BlockDAG’s sustainable mining approach. These cryptocurrencies take centre stage for their uniqueness and innovation.

<