CFTC seeks default order against futures trading fraudsters
The CFTC is requesting that the New York Southern District Court issues a default order against the operators of a Ponzi scheme that solicited at least $1,191,000 from over 40 individuals.
The United States Commodity Futures Trading Commission (CFTC) has requested that the New York Southern District Court enters a default order against Hasan Sarwar and Rachida Elfrimi, operators of Profit Management, a Ponzi scheme purported to be a futures trading business.
The Motions were filed by the CFTC on November 8, 2017.
According to the CFTC findings, from at least October 2012 through at least July 2014 Defendants Hasan Sarwar and Rachida Elfrimi operated a Ponzi scheme by which they fraudulently solicited and received at least $1,191,000 from over 40 individuals who invested in what was dubbed “futures trading” in a commodity pool named Profit Management.
The scheme operated via two websites: www.profitmanagement.biz and www.lendmeforprofit.com, which both touted the Profit Management pool. These websites claimed that Profit Management had “over 15 years of successful online futures trading experience … doing exactly what the ‘Big Boys’ and the Billionaires do inside the trading pit to move the market up or down any given minute.” The scheme also made false promises about returns: one of the marketing messages said that pool participants would “Double [their] Money in Less Than 5 months.”
In reality, the pool did not engage in any futures trading and Sarwar engaged in unprofitable futures trading for his own account, whereas the pool had not earned any futures trading profits. The pool participant funds were not placed in a Profit Management pool account under the name of a separate legal entity, but were instead deposited into bank accounts held in the names of and controlled by Sarwar and Elfrimi. Sarwar then transferred some of the money received from pool participants to a trading account held under his name. The rest of the money was used either for business or personal expenses, or Ponzi-style payments to pool participants from other participants’ funds.
The defendants are accused of, inter alia, fraud in connection with sale or purchase of futures contracts, failure to operate a commodity pool as a separate legal entity and commingling of pool funds, as well as of failure to register as CPOs.
The CFTC asks the Court to enjoin Defendants’ unlawful acts and practices and to compel their compliance with the Act. In addition, the Commission seeks civil monetary penalties, restitution, disgorgement, and remedial ancillary relief, such as trading and registration bans, rescission, pre- and post-judgment interest.
