Shipkevich Bitcoin and ICO Attorney
Felix Shipkevich July 12, 2011

UPDATE

The CFTC has published a press release and court order confirming that it has obtained a default judgement against the defendant. According to the release, “The order finds that, since May 2008, Goyep and Royal Returns, acting through Ortiz, fraudulently solicited 11 customers by guaranteeing monthly profits of 10 percent and falsely representing that such returns would be produced by successful forex trading…Customers were not able to withdraw their invested funds from defendants because funds were either lost trading, paid to other customers because the defendants operated a Ponzi scheme, or misappropriated, according to the order…Additionally, the order finds that the defendants had some customers send their funds directly to the relief defendants [Loredana and Natural Health Matters].”

Read more about this CFTC enforcement action.

The Wall Street Journal’s Market Watch is reporting that the CFTC has won its suit against David Ortiz and his companies Goyep International Inc. and Royal Returns Inc. A federal judge has ordered the defendants to pay $1.2 million in restitution and penalties in connection with their foreign exchange (“forex”) trading scheme. Ortiz’s wife Loredana and her company Natural Health Matters LLC was also ordered to return over $20,000 in ill-gotten gains.

The CFTC brought charges against the defendants in February of 2011. In a complaint filed with a federal judge, the Commission alleged that Ortiz fraudulently solicited investors for his companies for the purported purpose of trading forex. Not only were the defendants never registered with the SEC, as they claimed to be, but Ortiz made exaggerated claims about his forex trading experience, and made unrealistic promises about investment returns. In this manner, Ortiz solicited nearly $491,500 from acquaintances and the general public. However, only a small portion of those funds were ever used to trade forex, and most of those were lost. Instead, Ortiz and his wife used most of the money for personal expenses. When a participant asked for their funds to be withdrawn, Ortiz made Ponzi payments to them out of other investors’ money. Some customers also received fraudulent monthly account statements showing trading profits.

The judge has found the defendants committed solicitation fraud and misappropriated investor funds.

Read more about this forex Ponzi scheme and CFTC enforcement action.
Creative Commons License photo credit: State Records NSW

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