He was able to convince these investors by claiming that his companies had historically made large profits, between 8 and 25% per month.
The Commodity Futures Trading Commission (CFTC) has filed a civil suit against Eshaq M. Nawabi and his companies Nawabi Enterprise and Hyperion Consulting Inc. for fraud and embezzlement related to an off-exchange Forex trading program.
The defendants allegedly solicited funds totaling at least $543,000 from at least seven investors as part of the FX scam, according to the financial watchdog that oversees the U.S. exchange space.
Since October 2019, Eshaq M. Nawabi has solicited and pooled hundreds of thousands of dollars from at least seven pool participants for the alleged purpose of trading currencies.
He succeeded in persuading these investors by claiming that his companies had historically made large profits, between 8 and 25% per month, for themselves and forex trading pool participants. In addition to these high profit rates, the FX program said investors would be exposed to minimal risk and could withdraw their funds at any time.
Instead of exchanging pool participants’ funds as promised, the defendants diverted their money for Nawabi’s personal benefit and paid other pool participants.
In a classic Ponzi-like scheme, funds were diverted for Nawabi’s personal benefit and to pay pool participants trading returns that did not exist because defendants created and issued false account statements, the court said. CFTC.
When customers requested to withdraw funds, Eshaq M. Nawabi ignored or provided false promises and excuses, or engaged in conduct intended to delay payments, according to the complaint.
Chief District Judge Kimberly J. Mueller issued a legal restraining order against the defendants, freezing their assets and allowing the CFTC immediate access to their books and records.
The CFTC is seeking full restitution to the defrauded pool participants, restitution of any ill-gotten gains, civil monetary penalty, permanent record and trading bans, and a permanent injunction against the defendants.
In April, a New York court permanently barred Casper Mikkelsen from trading commodity interest and ordered him to pay $1,191,286 in restitution and a $3,573,860 fine for Forex fraud brought before him. the courts by the Commodity Futures Trading Commission.
The Danish citizen will have to pay triple the profits he made by committing the scam, promising his clients that he would use his discretion to trade forex on their behalf through his company, GNTFX.
In turn, his clients invested at least $1,536,782.47, but rather than using these funds for forex trading, Casper Mikkelsen embezzled the funds in a typical Ponzi scheme, paying out alleged trading profits forex to customers.
In late March, a US court convicted Abner Alejandro Tinoco and his company Kikit & Mess Investments, LLC, in another FX and Crypto Ponzi scheme case. The defendants fraudulently solicited at least $7.2 million from at least 322 clients, who intended to trade forex or cryptocurrency in managed accounts.
Not only did he use the funds to pay fake “investment profits” to customers in a Ponzi-like manner, but Tinoco also used the money to charter a private jet, buy a luxury mansion, and other real estate, and buying or leasing luxury automobiles.