CFTC Busts Forex Fraud: Individual to Pay $3.4M in Restitution and Penalty

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CFTC Busts Forex Fraud: Individual to Pay $3.4M in Restitution and Penalty

A court in Florida has entered a consent order against Joseph Carvajales, making him pay $3.4 million in restitution and penalty for his involvement in a fraudulent futures, forex, and options scheme. The order also includes a permanent injunction from further violations of regulations.

Announced yesterday (Thursday), the Florida resident was an employee of The W Group (WTG) and “willfully or recklessly” made false statements to the existing and prospective customers of the company in connection with futures, retail foreign currency contracts (forex), and options.

The court order obtained by the actions of the Commodity Futures Trading Commission (CFTC ) requires Carvajales to pay $2.4 million in restitution to the victims of the scheme and another $1 million as a civil penalty.

A $24 Million Fraud

According to the court filing, WTG operated from June 2013 through June 2020 and claimed to be using a commodity trading algorithm to trade futures, forex, and/or options on behalf of customers. The company and its associates, including Carvajales, further claimed that individual trading accounts were opened, customers’ funds were deposited into trading accounts, and trading was conducted. They even explained to the customers the profit potential that could be made and the risks of trading.

“In reality, individual trading accounts were never opened, customer funds were not deposited into trading accounts, and no trading was conducted,” the CFTC highlighted.

The regulatory agency initially moved against the company in February 2022. Earlier, it had already obtained a default order against the company and another individual, Larry Ramos Mendoza, finding that they misappropriated over $24 million from at least 220 customers.

The individuals even fraudulently solicited customers and sent them fabricated account statements showing purported profits and trading activity. The company and Ramos were previously ordered to pay about $7.5 million in restitution to the victims, along with a monetary penalty of over $22.4 million.

“The CFTC cautions restitution orders may not always 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 wrongdoers are held accountable,” the regulator noted.

A court in Florida has entered a consent order against Joseph Carvajales, making him pay $3.4 million in restitution and penalty for his involvement in a fraudulent futures, forex, and options scheme. The order also includes a permanent injunction from further violations of regulations.

Announced yesterday (Thursday), the Florida resident was an employee of The W Group (WTG) and “willfully or recklessly” made false statements to the existing and prospective customers of the company in connection with futures, retail foreign currency contracts (forex), and options.

The court order obtained by the actions of the Commodity Futures Trading Commission (CFTC ) requires Carvajales to pay $2.4 million in restitution to the victims of the scheme and another $1 million as a civil penalty.

A $24 Million Fraud

According to the court filing, WTG operated from June 2013 through June 2020 and claimed to be using a commodity trading algorithm to trade futures, forex, and/or options on behalf of customers. The company and its associates, including Carvajales, further claimed that individual trading accounts were opened, customers’ funds were deposited into trading accounts, and trading was conducted. They even explained to the customers the profit potential that could be made and the risks of trading.

“In reality, individual trading accounts were never opened, customer funds were not deposited into trading accounts, and no trading was conducted,” the CFTC highlighted.

The regulatory agency initially moved against the company in February 2022. Earlier, it had already obtained a default order against the company and another individual, Larry Ramos Mendoza, finding that they misappropriated over $24 million from at least 220 customers.

The individuals even fraudulently solicited customers and sent them fabricated account statements showing purported profits and trading activity. The company and Ramos were previously ordered to pay about $7.5 million in restitution to the victims, along with a monetary penalty of over $22.4 million.

“The CFTC cautions restitution orders may not always 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 wrongdoers are held accountable,” the regulator noted.

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