BULLETIN: CFTC Shuts Down Forex Scam Allegedly Operated In Wisconsin By Canadian Who Claimed Belize Incorporation; Website Of JadeFX Taken Offline; Federal Judge Orders Asset Freeze

BULLETIN: A Canadian man was running a Forex scheme in the United States that touted its incorporation in Belize, the CFTC said.

The scheme was operating from Wisconsin Dells, Wisc., and had at least six corporate bank accounts and two PayPal accounts into which customers sent money, the CFTC said.

Named defendants in a case of solicitation fraud were Jacob Juma Omukwe, JadeFX Ltd. and Jade Investments Group LLC, all of Wisconsin Dells. Omukwe is a citizen of Canada, and the CFTC said that he “misappropriated more than $3.2 million from more than 500 customers in the United States and throughout the world to trade forex.”

A federal judge has issued an emergency asset freeze. The JadeFX website has been taken offline. Neither Omukwe nor the companies was registered with the CFTC, and the website contained “many contradictory statements that appear to be the product of the Defendants having ‘lifted’ statements from various other websites hosted by legitimate forex dealers,” the CFTC charged.

The case originally was filed under seal March 1. The seal was lifted after U.S. District Judge William M. Conley of the Western District of Wisconsin ordered an asset freeze and Omukwe consented to a permanent injunction.

Omukwe told a sea of lies, according to the complaint. Among the lies was a claim that “JadeFX is operated out of Belize and does not conduct business in the United States,” the CFTC charged.

Between June 2009 an Jan. 27, 2010, Omukwe and his fraudulent companies received more than $400,000 from investors “all over the world,” the CFTC charged.

“However, during this eight month period, JadeFX had no forex trading account to place forex trades on behalf of customers,” the agency alleged.

After Jan. 27, 2010, investors plowed more than $3 million into the scheme, and Omukwe kept about $2 million, according to the CFTC.

Alarmingly, the CFTC added, “In order to foster the false impression that customer money is segregated from that of JadeFX, customers can download a software program from the Defendants’ website that purportedly enables customers to place forex trades in the customer’s account.

“While Defendants create the appearance of segregated accounts for customers using the software program, in fact no such accounts exist,” the agency continued. “In reality, customers who send funds to the JadeFX or Jade bank accounts have no control over their funds once the money is sent to the Defendants’ bank accounts, which are controlled by Omukwe.”

And Omukwe also falsely claimed to be “immune” to both U.S. law and laws of the individual states, the agency charged.

All in all, the agency said, Omukwe had 12 bank accounts as part of the scheme, and used six of them to accept money from U.S. customers.