Valdas Dapkus ordered to pay over $2.8m for FX scam Tradewale

Rick Steves

The court found that Tradewale entities intentionally misled individuals with claims of a “unique trading system” using “artificial intelligence” and promising substantial returns with minimal risk. Despite representations that accounts could be easily accessed, customers in the United States reportedly faced difficulties withdrawing funds, as the defendants misappropriated them for unauthorized purposes.

The U.S. District Court for the District of New Jersey has issued a default order of final judgment against Valdas Dapkus, an Illinois-based individual, along with two entities under his control—Tradewale LLC and Tradewale Managed Fund.

The Commodity Futures Trading Commission (CFTC) announced this decision, marking the resolution of its September 2021 action against Dapkus and the Tradewale entities.

Tradewale was a fraudulent Retail OTC FX fund

The court found all defendants liable for fraudulent activities, specifically for soliciting investments in a purported retail off-exchange foreign currency fund managed by Tradewale and misappropriating investor funds. Additionally, the Tradewale entities were held liable for failure to register as commodity trading advisors (CTA).

The orders, issued on November 28, require Dapkus and the Tradewale entities to jointly and severally pay $713,520 in restitution and a $2,140,560 penalty. Permanent injunctions have also been imposed, preventing them from trading on CFTC-regulated markets and engaging in conduct violating the Commodity Exchange Act (CEA).

The court’s decision stems from a September 2021 complaint, alleging that Tradewale made material misrepresentations and omissions in soliciting public investments. The court found that Tradewale entities intentionally misled individuals with claims of a “unique trading system” using “artificial intelligence” and promising substantial returns with minimal risk. Despite representations that accounts could be easily accessed, customers in the United States reportedly faced difficulties withdrawing funds, as the defendants misappropriated them for unauthorized purposes.

The court emphasized that Tradewale entities acted as CTAs by soliciting funds for an investment vehicle without proper registration with the CFTC. The orders highlight the misappropriation of approximately $713,520 from around 17 customers, none of whom received any return on their principal investment.

“With brokers having over 50 years of combined experience — and utilizing four separate trading systems that have been tested in all market conditions — we offer financial services that are powerful and dependable,” said Tradewale’s LinkedIn page. The scam’s website has been shut down.

Avinash Singh ordered to pay over $100 million for FX scam

Last week, a U.S. District Court in Florida has ruled against Avinash Singh and his company, Highrise Advantage, LLC, in a default judgment. The CFTC had brought charges against Singh and Highrise for engaging in fraudulent activities, soliciting and misappropriating funds through a master commodity pool and several feeder pools.

The court found that only a fraction of the nearly $58 million collected from investors was used for actual trading. Over $25 million was misappropriated, with funds being diverted to personal expenses and Ponzi-type payments.

The judgment includes a permanent injunction against Singh and Highrise, permanently bars them from registering with the CFTC or trading on any registered entity. Additionally, they are ordered to pay over $100 million in restitution and civil penalties.

This ruling follows consent orders entered against the operators of the four feeder commodity pools implicated in the scheme. These pools, operated by Surujpal Sahdeo, Daniel Colegero, Randy Rosseau, and Hemraj Singh, were also part of the enforcement action.

In a related criminal case, Singh faces charges of wire fraud and money laundering, brought by the U.S. Attorney for the Middle District of Florida. As a result, he is facing up to 20 years in federal prison for each wire fraud count and up to 10 years for each money laundering count.

Between February 2013 and September 2020, Singh was accused of defrauding over 1,100 victims, accumulating millions under the guise of investing in FX markets. He lured investors with false claims of a successful forex trading track record and promises of guaranteed safety for their funds against trading losses.

However, these representations were far from the truth. Rather than investing the funds in forex trading as promised, Singh had been running a classic Ponzi scheme, using funds from new investors to pay existing ones. Out of the sums he received, Singh misappropriated roughly $45 million for payments to other investors and millions more for personal expenses, investing less than 5% in actual forex trading.

To cover his fraud, Singh issued fabricated monthly statements, falsely showing profitable forex investments. In reality, the few investments he made often resulted in losses, which he attempted to conceal with these falsified statements. In a bid to recover assets for the victims, the Asset Recovery Division of the U.S. Attorney’s Office has filed a civil complaint seeking the forfeiture of a residence bought with more than $920,000 derived from these fraudulent activities.

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