CFTC sues Puerto-rico based FXL for multi-million dollar FX Ponzi scheme
“Affinity-based fraud schemes all-too-often seek to exploit the trust generated within a community. Perpetrators target the identified communities because they are familiar with the fears and challenges that may deter investors from reporting or effectively communicating the details of the fraud to law enforcement or regulatory authorities.”
The Commodity Futures Trading Commission has filed a complaint in the U.S. District Court for the District of Puerto Rico against Ramon Salvador Delgado-Gomez and his companies FX Latino and FXL Investment, Walmy Rivera-Santiago and her company JRH, and Hector Javier Santos-Pagan and his company Infinity.
The defendants are charged with fraud and registration violations in connection with a multi-million dollar Ponzi scheme involving pooled investments in retail foreign currency trading.
FXL scammed over 2,000 individuals in Puerto Rico and continental United States
The alleged FX scam took place from approximately November, 2019 through February, 2021, with Gomez, aided and abetted by the two other individual defendants, conducting a scheme that solicited and accepted at least $17 million from over 2,000 individuals and entities in Puerto Rico and the continental United States for the purpose of engaging in a pooled investment in forex trading.
The FX trading firm, FXL, engaged in little to no trading, and, instead, was used to misappropriate at least $13 million of pool participants’ funds to pay purported returns to existing pool participants in a manner typical of a Ponzi scheme.
Funds were also used to pay business and personal expenses and to make payments to Gomez, some of the aiders and abettors, and other unnamed individuals and entities involved in the scheme.
In addition to the scam, the CFTC also charged FXL with failure to register as a commodity pool operator (CPO) and Gomez with failure to register as an associated person of a CPO.
The Defendants allegedly launched advertisements on social media platforms such as Instagram and promoted public seminar and investor coaching campaigns to entice more than two thousand investors to invest at least $27 million.
Similar to any number of “get-rich-quick” schemes promising exceptional returns while, in fact, perpetuating financial fraud, Defendants never actually engaged in trading or generated any profits.
“Defendants in such fraud actions often target vulnerable individuals within a specific community based on their shared faith, heritage, culture, or native language”, said CFTC Commissioner Kristin Johnson. “Affinity-based fraud schemes all-too-often seek to exploit the trust generated within a community. Perpetrators target the identified communities because they are familiar with the fears and challenges that may deter investors from reporting or effectively communicating the details of the fraud to law enforcement or regulatory authorities. In this case, the allegations suggest that Defendants targeted Spanish-speaking individuals in the Puerto Rican community.”
