Forex scammer in US Court Net Fined $3 million

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Forex scammer in US Court Net Fined $3 million

Reports this month have revealed that the US Federal Court have ordered Kevin O. Ramirez to pay a fine of almost $3 million for fraudulent solicitation of funds and misappropriation of funds.

The reports came from the US Commodity Futures Trading Commission (CFTC) in July. The Commission had charged a forex trader based in Texas for a suspected investment fraud. The charges had come after investigation on social media found that the accused had issued false claims on Instagram and WhatsApp. The suspect had swindled more than 400 victims and have been mandated to pay back a sum of $2,935,983.48.

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The Scam

It was revealed in the course of the scam case that the defendant had sold a fake software to his victims. The software was supposed to somehow double the victims’ investments. The software came at a price of $250 monthly. He also offered them other trading advises on a personal level that for a price of $25,000. Mr. Ramirez deceived them into believing that the money they deposited were being traded and increased by himself. Others believed that they were investing in a signal service created by the scammer.

The matter came to a head when his clients discovered that instead of buying contracts as was ordered, Ramirez spent the money on his own company and other personal projects.

The fine comes with another condition that Ramirez is not to be found running any scam again. Or any behavior that is contrary to the US Commodity Exchange Act or he is to face further consequences.

Although the CFTC goes a long way in ensuring that US Forex brokers do not step out of line, it warns citizens and others to ensure that they are careful where they invest their money. This is because, the Commission does not guarantee that all their losses can be recovered in full.

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Federal court fines forex scammer $33 mln

NEW YORK (Reuters) – A U.S. federal court imposed the largest fine against an individual sued by the Commodity Futures Trading Commission on Thursday, slapping $33 million in sanctions on a foreign currency scam artist who promised investors annual returns of 150 percent.

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A man looks at a foreign exchange rate display outside a securities firm in Tokyo November 28, 2006. A U.S. federal court imposed the largest fine against an individual sued by the Commodity Futures Trading Commission on Thursday, slapping $33 million in sanctions on a foreign currency scam artist who promised investors annual returns of 150 percent. REUTERS/Toshiyuki Aizawa

Russell Cline of Portland, Oregon, was also sentenced to more than eight years in prison by the U.S. District Court for Oregon.

Cline persuaded people to invest $40 million in a currency fund run by his company, Orion International Inc. He spent the money on personal expenses such as homes, cars and entertainment, according to an order from the court.

“This was a massive financial fraud,” said Gregory Mocek, director of enforcement at the CFTC, the regulator that brought the suit.

“However, in light of our success in prosecuting retail forex scams over the last four years, we are hopeful that all of those involved in the illegal activity will see that their deceptive business models are becoming less attractive,” he said.

Cline told customers to send funds to his accounts at the Bank of America and at the Australian New Zealand Bank in Samoa, promising average annual returns of more than 150 percent, the order said.

Cline was ordered to pay back $16.6 million to customers and was penalized another $16.6 million. His attorney could not be reached for comment.

The foreign exchange market in which nearly $2 trillion changes hands daily on average is one of the most liquid in the world, and firms luring retail investors to the burgeoning market have proliferated in the last decade.

A sharp rise in currency trading scams promising high returns with minimal risk led the CFTC, a regulator of the commodity futures and options market, to issue an advisory on its Web site, warning investors of “foreign currency trading frauds.”

In June 2006, the court imposed a fine of $86 million on Cline’s company and directed restitution of $28.8 million to be paid back to customers.

FOREX Ponzi Scammer Hit With Major Prison Sentence

According to federal prosecutors and regulators, between August 2004 and June 2009, Jeffery Lowrance, 50, and others at his direction fraudulently solicited investments for a foreign exchange (“Foreign”) trading program. Among the alleged material misrepresentations was the profitability of the Forex trading of First Capital Savings & Loan, Ltd., an organization which Lowrance incorporated in 2007 in New Zealand — he owned First Capital and served as its chairman and chief executive officer. The Feds further alleged that Lowrance had fraudulently misstated the expected return on and risk involved with Forex investments and the use of funds raised from investors.

First Capital had taken over Lowrance’s business Mentor Investing Group, Inc., initially located in San Diego and later Panama City, Panama. Both Mentor and First Capital claimed to engage in Forex trading, and offered and sold investments through a network of salesmen and investor referrals.

Utilizing a Ponzi scheme replete with fraudulent account statements to conceal the true financial condition of investments, Lowrance misrepresented to potential investors that they would be paid as much as 4 to 7% monthly interest. In fact, little of the invested funds wound up in Forex trading but, as these things all too often develop, the money was diverted – in this case to pay First Capital’s expenses, expenses of unrelated business ventures including a newspaper, and to make payments for Lowrance’s own benefit and that of his family and associates

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2009 Collapse

Lowrance had moved to Panama around 2006, operated the fraud scheme from Panama City until approximately 2009, at which time the Ponzi scheme collapsed, and he then fled to Peru. In 2009, Lowrance was charged in a criminal complaint filed in the Northern District of Illinois, and, thereafter, in August 2020, he was indicted on:

  • five counts of mail fraud,
  • one count of wire fraud, and
  • four counts of money laundering.

The Indictment alleged that Lowrance, fraudulently obtained approximately $31 million from 452 investors, resulting in some $17.6 million in losses to 343 investors after deducting Ponzi-type payments. when it collapsed in 2009. USA v. Jeffery Lowrance, 09 CR 00578 (Aug. 5, 2020, N.D. Ill.)

Lowrance was arrested in February 2020 in Peru and extradited to Chicago. On July 15, 2020, Lowrance was arraigned in federal court in Chicago following his arrest and extradition from Peru.

Each count of wire and mail fraud and money laundering carries a maximum penalty of 20 years in prison and a $250,000 fine, and restitution is mandatory. The court may also impose a fine totaling twice November 4, 2020

In July 2020, Lowrance was named in separate Securities and Exchange Commission in the Northern District of California and the Commodity Futures Trading Commission in the Northern District of Illinois civil enforcement actions against Lowrance and his businesses.

CFTC Judgment And Injunction

On November 4, 2020, the CFTC obtained a default judgment and permanent injunction in the Northern District of Illinois against Lowrance and First Capital, requiring them to pay jointly and severally a $3.3 million civil monetary penalty and $1.2 million in restitution. Also, the consent order imposes permanent trading and registration bans against Lowrance and First Capital and requires any person or entity providing web-hosting or domain registration hosting services for the defendants to remove from the Internet any websites that solicit customers to trade commodity futures or Forex.

Criminal Sentence

After pleading guilty to one count each of wire fraud and money laundering in July 2020, Lowrance was sentenced in his criminal case on November 15, 2020, to 170 months in prison and ordered to pay $17.64 million restitution.

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