BULLETIN: A Delaware company accused by the CFTC in January of illegally hawking Forex offers has been hit with a $280,000 penalty and ordered to remove its Forex solicitation pages from the Internet.
U.S. District Judge James B. Zagel of the Northern District of Illinois entered the order against ForInvest Group of Delaware. ForInvest also is known as ForInvests Group LLC.
ForInvest also was banned permanently “from engaging in any commodity-related activity, including trading, and from registering or seeking exemption from registration with the CFTC,” the CFTC said.
The company was one of 14 Forex outfits sued by the CFTC in what was described as a nationwide sweep of unregistered firms illegally targeting U.S. residents.
ForInvest advertised that it accepted payments via Perfect Money, a murky firm purportedly based in Panama that allegedly was used by a company that defrauded thousands of deaf investors in a scheme known as Imperia Invest IBC. The SEC said in October 2010 that Imperia Invest had stolen millions of dollars from investors.
In the same CFTC sweep, the agency also sued InstaTrade Corp., doing business as InstaForex. InstaForex is an advertiser on the TalkGold Ponzi scheme and criminals forum, and research showed that InstaForex — like Imperia Invest and ForInvest — also used Perfect Money.
Imperia Invest and InstaForex also were promoted on TalkGold and other Ponzi forums, according to records.
Zagel ordered “[a]ny person or entity providing web-hosting or domain name registration services” for ForInvest to preserve documents and “[a]ny person or entity providing web-hosting or domain name registration services to “remove or cause to be removed from the Internet all webpages within their control . . .”
InstaForex, a company accused by the CFTC last month of targeting U.S. customers to purchase unregistered offerings and paying through Perfect Money, says participants can win this Lotus — but they have to pay to play by depositing at least $1,000 USD. Sweepstakes that require a purchase by participants are illegal in the United States.
SPECIAL REPORT:UPDATED 2:27 P.M. ET (U.S.A., FEB. 9) Federal court and web records show that at least three of the 14 purported Forex dealers named defendants in a major sweep of unregistered firms last month by the Commodity Futures Trading Commission advertised that they accepted funds from Perfect Money.
Perfect Money is a murky money-services business purportedly based in Panama that allegedly was used by a company that defrauded thousands of deaf investors by promising Visa debit cards and returns of 1.2 percent per day, according to federal records. The name of a man purported to be Perfect Money’s contact person in Panama City is referenced in federal court filings that tie money from the alleged EMG/Finanzas Forex fraud scheme to an international narcotics probe that led to the seizure of at least 59 bank accounts in the United States and the companion seizure of 294 bars of gold and at least seven luxury vehicles.
The number of purported Forex dealers that allegedly accepted Perfect Money and were named defendants in the CFTC sweep could be higher than three because not all of the defendants publicly disclosed the precise mechanisms by which they accepted payments from U.S. customers.
According to court filings and web records, some of the companies also advertised that they accepted funds from Liberty Reserve, another murky offshore processor, and even PayPal. PayPal’s Acceptable Use Policy specifically bans the use of its services for “currency exchanges,” businesses that support Ponzi and pyramid schemes and businesses associated with “off-shore banking.”
PayPal says it requires “pre-approval” for any businesses “selling stocks, bonds, securities, options, futures (forex) or an investment interest.” Whether any of the businesses named in the CFTC Forex complaints received approval from PayPal to either use its name in promos or use its services to collect money is unclear.
Records show (see paragraph 17 of SEC complaint) that Perfect Money payments were accepted by Imperia Invest IBC, the mysterious offshore company accused by the SEC in October 2010 of pulling off a spectacular fraud that fleeced at least 14,000 people of millions of dollars. Included among the Imperia victims were thousands of Americans with hearing impairments, the SEC said.
Imperia was promoted on Ponzi scheme and criminals’ forums such as TalkGold, which also promoted at least two of the companies named defendants in the CFTC’s Forex sweep. One of the companies — InstaTrade Corp., doing business as InstaForex — is advertising on TalkGold that participants will have a chance in the months ahead to win a Lotus Elise, a sports coupe that carries a price tag of more than $50,000.
To win the expensive car, however, investors have to pay to play, according to InstaForex. Sweepstakes that require a purchase are illegal in the United States, according to the Federal Trade Commission.
InstaForex investors can qualify to win the Lotus by replenishing “the real trading account in InstaForex Company with 1000 USD or more during [the] Campaign period,” the company says in stilted English.
“Participant has a right to register in the Campaign more than 1 account and raise his/her chances for the victory,” InstaForex continues in stilted English. “However, in case contest administration detects more than 100 accounts registered by one person, it reserves the right to decrease the number of accounts till (sic) 100.”
Meanwhile, the name of Roger Alberto Santamaria del Cid — the purported contact person of Perfect Money — appears in federal court filings in the EMG/Finanzas Forex forfeiture case. The EMG/Finanzas case was brought last year by a federal task force based in Florida and alleges that tens of millions of dollars seized in Arizona as part of the probe were linked to the international narcotics trade. (See Paragraph 10 of the federal affidavit for the reference to del Cid, who is identified as the “Secretary” of EMG. Del Cid is referenced in domain-registration data for PerfectMoney.com as the contact person for Perfect Money Finance Corp.)
Elements of the prosecution against more than $100 million in assets linked to EMG/Finanzas were brought by members of the same task force that brought civil and criminal prosecutions against Florida-based AdSurfDaily. Some of the members of the task force have experience working with the U.S. Drug Enforcement Administration (DEA), the U.S. Secret Service, the IRS and other agencies to reverse-engineer fantastically complex financial crimes.
At least one of the investigators, according to records, was instrumental in bringing the successful money-laundering conspiracy prosecution against the e-Gold payment processor in 2007. The e-Gold case was brought in U.S. District Court for the District of Columbia. It resulted in guilty pleas announced on July 21, 2008.
About two weeks later, the U.S. Secret Service raided ASD’s headquarters in Quincy, Fla. Federal prosecutors later alleged ASD was operating a Ponzi scheme that had gathered at least $110 million — and had ceased using e-Gold “shortly after” the e-Gold indictments were announced in April 2007.
Federal prosecutors also alleged that 12DailyPro and PhoenixSurf — two autosurfs charged by the SEC with operating Ponzi schemes — also had used e-Gold. In December 2010, prosecutors said that ASD also had the ability to accept money from e-Bullion, yet-another processor accused of accepting and distributing Ponzi funds from various schemes.
James Fayed, the operator of e-Bullion, was accused of arranging the July 2008 murder of Pamela Fayed, his estranged wife and potential witness against him. Pamela Fayed’s body was found in a California parking garage just days before the ASD raid in Florida.
Erma Seabaugh, known among ASD members as the “Web Room Lady,” used E-Bullion in November 2007 to transfer $10,510 to ASD, according to a forfeiture complaint filed in December 2010.
On Jan. 26, the CFTC sued 14 purported Forex companies simultaneously, alleging that they were unregistered entities that were illegally targeting U.S. residents. At least three of the companies — ForInvest (Perfect Money reference appears online), InstaTrade Corp. (see Paragraph 21 of CFTC complaint for the Perfect Money reference) and Kingdom Forex Trading and Futures Ltd. (see Paragraph 17 of CFTC complaint for the Perfect Money reference) — accepted Perfect Money, according to records.
Two of the complaints — InstaTrade and Kingdom Forex — were brought in the U.S. District Court for the District of Columbia, the same venue in which the e-Gold case was brought in 2007. The case against ForInvest was brought in U.S. District Court from the Northern District of Illinois.
Perfect Money advertised a relationship with at least two of the defendants named in the CFTC cases: InstaForex and FXOpen, according to web records.
On its website, Perfect Money advertised its relationship with InstaForex and FXOpen, two companies accused by the CFTC of targeting Americans with unregistered Forex offerings. The FXOpen website now appears to be blocked from loading in the United States. It was not immediately clear if the site will load in other parts of the world.
BULLETIN: The Commodity Futures Trading Commission has gone to federal courts in New York, Chicago, the District of Columbia and Kansas City and simultaneously filed 14 lawsuits against Forex companies to enforce registration requirements and provisions of the Dodd-Frank Act.
One of the lawsuits — one filed in the District of Columbia against a Nevada company known as Kingdom Forex Trading and Futures Ltd. that claims to be a “legally registered company in Belize and Nevis” — alleges that the firm was not registered with the CFTC but that U.S. customers were instructed to send money via wire and credit/debit cards. Money also can be sent by Liberty Reserve, a payment processor favored by online financial schemes. Liberty Reserve says it operates from Costa Rica.
The case against Kingdom Forex has been assigned to U.S. District Judge Rosemary Collyer, the same judge assigned to hear the AdSurfDaily autosurf Ponzi scheme cases.
This morning, Liberty Reserve was advertising on its website a company known as FXOpen.com. FXOpen.com, according to the CFTC, is the website of a firm known as FXOpen Investments Inc. — yet-another of the defendants sued in the sweep.
FXOpen is described in the complaint as “company of undisclosed origin” that claims “its headquarters is located at Ebene Heights No. 34, Cybercity Ebene, Mauritius.”
It also claims to have “worldwide regional offices” in Cairo, Egypt; Paris, France; Kuala Lumpur, Malaysia; Jakarta, Indonesia; Almaty, Kazakhstan; and Moscow, Russia, CFTC charged.
“FXOpen’s websites, including www.fxopen.com, are hosted on servers” in the United States, CFTC charged in the complaint.
The firm, whose website would not load this morning when visitors clicked the link at the Liberty Reserve page, is accused of directly soliciting U.S. investors and claiming U.S. law does not apply to it.
“[I]n the ‘Forum’ section of its website, FXOpen representatives specifically solicit United States residents to open accounts with FXOpen, in part by advertising that potential customers in the United States can escape United States laws and regulations by opening accounts with FXOpen,” CFTC charged.
“For example, on October 5, 2010, in response to a question regarding whether FXOpen could accept applicants from the United States after October 18, 2010 following recent CFTC rulings, an FXOpen representative answered with a post, stating, ‘Since we don’t have an office in the US, nor are we an affiliate of a US based broker, we are not bound by CFTC rulings. Rest assured we will be able to accept US clients for the foreseeable future unless a legal impediment appears,’” CFTC charged in the complaint.
All of the companies named defendants in the sweep are accused of “illegally soliciting members of the public to engage in foreign currency (forex) transactions and that they are operating without being registered with the CFTC,” the agency said.
Among the defendants are domestic and offshore companies.
Here is the lineup of defendants in what the CFTC described as a major nationwide sweep:
EuroForex Development LLC, a Delaware LLC.
FIG Solutions Limited Inc., a Delaware corporation.
ForInvest, a Delaware corporation.
FXOpen Investments Inc., a Delaware LLC.
FXPRICE, a Delaware LLC.
GIGFX LLC., a Delaware company.
InovaTrade. Inc., a company with purported offices in Florida.
InstaTrade Corp., d/b/a InstaForex, a British Virgin Islands company.
InvesttechFX Technologies. Inc., a Canadian corporation located in Toronto.
J&K Futures. Inc., a company with purported offices in California and New York.
Kingdom Forex Trading and Futures. Ltd., a Nevada company.
BULLETIN: A Delaware company accused by the CFTC in January of illegally hawking Forex offers has been hit with a $280,000 penalty and ordered to remove its Forex solicitation pages from the Internet.
