CFTC Indicts Three Men for $28 Million FX-Linked Ponzi Scheme
Three men have been indicted by U.S. authorities over a $28 million FX-related Ponzi scheme. According to reports on the incident, the defendants exploited the religious affiliations of African immigrants and targeted the individuals.
The financial regulators filed their cases against the two companies in Maryland and their principals, as the regulators accused them of operating a Ponzi scheme, stealing over $28 million from more than 1,200 investors in the process.
Defendants demanded investment funds from victims
The Commodity Futures Trading Commission (CFTC) revealed that Dennis Jali, a Maryland resident and a South African citizen, was the leader of the Ponzi scheme assisted by Arley Johnson and John Frimpong. According to the filed case, the defendants demanded investment funds from their victims through their firms, The Smart Partners LLC and 1st Million LLC.
Jali rented an office space where he can discuss with potential victims; thereby creating an illusion the company is a legitimate one.
Also, he did not register with the CFTC, which is required for any company operating in the country. Apart from these fraudulent actions, Jali deceitfully misrepresented himself, falsely claiming to be a self-made millionaire and providing non-existent track records.
He gave the victims false account histories that show non-existent trading returns. He also provided false information about the experience of the executives and the trades they have carried out in the past. But in the real sense, there wasn’t any real assembly of business executives for the company.
Defendants targeted African immigrants
According to the complaint, the defendants targeted church communities and vulnerable African immigrants after exploiting their religious affiliations and common ancestry.
Although the fraud was a Ponzi scheme, the defendants said the funds would be used in various crypto trading pools and FX investments that will be managed by licensed traders. In their promotion of the scheme, they promised the investors free returns of between 400% and 1700% of their investment monthly.
The defendants also said the funds of the participants will be held in escrow or trust, and later transferred to them by the end of the participation term.
To convince the investors, the defendants sent $18 million of the $28 funds back to the first investors. They spend the remaining $7 on business expenses, personal travel, buying expensive cars, and spending on an exotic vacation.
More defendants were named in by the CFTC, as they were accused of receiving the victims’ funds. The financial authority has asked them to return the funds.
Comments are closed.