CFTC’s Kristin Johnson calls for investor education after $57 million Forex scam
“Fraudsters offering guaranteed, or unusually high, returns—or both—should in particular prompt scrutiny and additional diligence before transferring any funds.”
The Commodity Futures Trading Commission has once again announced a case against an FX ponzi scam, this time operated by individuals Daniel Cologero, Surujpaul Sahdeo, Randy Rosseau, and Hemraj Singh using four entities: Green Knight Investments, LLC; Bull Run Advantage, LLC; SR&B Investment Enterprises, Inc.; and King Royalty, LLC.
A consent order was issued to resolve the CFTC claims originally brought on September 9, 2020, which accuse the defendants of orchestrating a foreign exchange (forex) scheme.
Only Avinash Singh, and his company, Highrise Advantage LLC (Highrise), chose not to settle. According to the regulator, Singh fraudulently solicited and misappropriated funds through Highrise, which he operated as a master commodity pool. The other three defendants operated feeder pools that directed participant funds to Highrise.
$57 million from 1,300 investors
Avinash Singh allegedly conducted his solicitations mostly through word of mouth, including through solicitations by the other defendants, and claimed to be a successful trader with more than ten years of forex trading experience, offering low risk and a track record of positive gains and no losses. In reality, Singh’s trading only ever involved a small portion of the funds entrusted to him, and this trading resulted only in losses, the CFTC stated.
Besides commingling funds with non-pool participant funds, Avinash Singh allegedly distributed false monthly statements showing profits and no losses every month, and these fictitious results were repeated by the other defendants, ultimately growing the FX scheme to more than $57 million in deposits from more than 1,300 pool participants.
From those $57 million, the FX scam only used less than $2,408,000 for forex trading, on which it realized losses, not gains. Like any other Ponzi scheme, they used a portion of the funds to make payments to some of the participants and feeder pools that were derived from other participant funds and not trading profits.
The settling defendants are ordered to pay, collectively, more than $6.5 million in restitution, as well as $3.8 million in civil monetary penalties.
CFTC’s Kristin Johnson commented on the case: “Investor education and enforcement actions are critical to our efforts to prevent fraudsters from bilking hard-working investors. Accordingly, I strongly encourage all members of the public to stay informed about the potential scams and abuses in forex markets by visiting our investor advisory page. Fraudsters offering guaranteed, or unusually high, returns—or both—should in particular prompt scrutiny and additional diligence before transferring any funds.”
