The U.S. Commodity Futures Trading Commission (CFTC) today revealed that the U.S. District Court for the Western Division of California’s Central District entered an order granting the CFTC’s submission for a default judgment (Order) accompanied by a judgment aligned with the Order (Judgment) against the accused Jin Choi (Choi), who is a Republic of South Korea citizen whose last known address was in Los Angeles, California, and his businesses ApuroFX, Apuro Holdings Ltd (Apuro), JCI Holdings USA (JCI), and JCI Trading Group, LLC (collectively referred to as the defendants/ the accused), for their involvement in a foreign currency (Forex) scam that affected clients residing in Australia, the United States, Indonesia and in other countries.
The Honorable Dolly M. Gee entered the judgment on 5 March 2019 requiring the defendants, both severally and jointly, to return $1,121,672 to the swindled clients and to pay a civil fine of $1,121,672. The judgment also imposed a lifetime trading and registration ban on the accused, and bars them from breaching the rules contained within the Commodity Exchange Act and other CFTC regulations, as outlined within the initial complaint filed on 14 May 2018.
The Order found that the accused fraudulently requested for and received a minimum of $1,145,672 from 14 clients under the pretense of trading leveraged or margined retail FX contracts off traditional exchanges. The Order states that the accused never used any of the funds solicited from clients for the trading as they had promised. Instead, Choi misappropriated all of client funds to support his lavish lifestyle and returned about $24,000 to specific clients claiming that they were “profits,” in an operation similar to a “Ponzi” scheme, while they kept pretending to be trading their clients’ funds profitably.
The Order also discovered that the defendants intentionally misrepresented the returns on their investments by promising annual returns of between 20% and 50%, which were supposed to be distributed to their clients each quarter. The accused also misled their clients that Apuro was a futures commission merchant licensed by the CFTC among other material fabrications, while the Order discovered that both JCI and Apuro were unregistered commodity trading advisors (CTAs) and that Choi was an unlicensed individual associated with the CTAs.
The CFTC has warned victims that orders issued mandating defendants to repay the victims of their scams may not result in the victims receiving the amounts as the accused may not have adequate funds or assets. However, the CFTC remains committed to protecting clients by ensuring that wrongdoers are liable for their actions.
The CFTC recently awarded over $2 million to a whistle-blower as part of its efforts to protect consumers. It also recently fined Mizuho Bank $250,000 and charged interdealer broker TFS-ICAP with fraud.