Participant in SEC impersonation and binary options scam pleads guilty

Frank Gregory Cedeno, one of the participants in a fraudulent scheme involving fake pledges for binary options losses recovery and impersonation of employees of the United States Securities and Exchange Commission (SEC), has earlier this week pleaded guilty to conspiracy to commit wire fraud and conspiracy to commit money laundering.

U.S. District Court Senior Judge George A. O’Toole, Jr. scheduled sentencing for March 21, 2019.

From at least November 2015 through November 2017, Cedeno conspired with others to defraud victims by pretending to be employees of the SEC. Cedeno and his co-conspirators demanded money from victims, most often – victims of binary options brokers and Banc de Binary, in particular. The victims were directed to send the money to members of the conspiracy, including Cedeno. The conspirators who received the money generally withdrew it from bank accounts quickly, then forwarded much of it to individuals in the Dominican Republic.

In one common version of the scam, victims received e-mails that used official-seeming documentation and the SEC seal to support a false claim that the targeted investor must pay a fee in order to receive a portion of the settlement of the SEC’s lawsuit against Banc de Binary.

In August this year, co-conspirator Leonel Alexis Valerio Santana, 28, of Boston, was sentenced to 63 months in prison, three years of supervised release, and ordered to pay restitution of $105,869 after pleading guilty to his role in the scheme.

The charge of conspiracy to commit wire fraud provides for a maximum sentence of 20 years in prison, three years of supervised release, a fine of up to $250,000, or twice the gross gain or loss in the offense, and restitution. The charge of money laundering conspiracy provides for a maximum sentence of 20 years in prison, three years of supervised release and a fine of $500,000 or twice the value of the funds involved in the money laundering, whichever is greater.