Florida court orders assets frozen in CFTC anti-fraud action against Forex trading investment ponzi scheme

The U.S. Commodity Futures Trading Commission (CFTC) today announced that it filed a civil enforcement Complaint in the U.S. District Court for the Middle District of Florida, charging Defendants Allied Markets LLC, and its principals Joshua Gilliland and Chawalit Wongkhiao, all of Jacksonville, Florida, with operating a fraudulent forex commodity pool in violation of the Commodity Exchange Act (CEA) and CFTC Regulations. In addition, none of the Defendants has ever been registered with the CFTC, as required.

On January 7, 2015, the day after the CFTC Complaint was filed under seal, U.S. District Judge Marcia Morales Howard issued an emergency Order freezing and preserving assets under the Defendants’ control and prohibiting them from destroying documents or denying CFTC staff access to their books and records. The Court has scheduled a hearing for January 21, 2015, on the CFTC’s motion for a preliminary injunction.

The CFTC Complaint charges that, as early as January 2012, the Defendants fraudulently solicited more than $1 million from members of the public to trade forex in a commodity pool. As alleged, Defendants Gilliland and Wongkhiao misappropriated funds to pay their personal expenses. For example, instead of trading forex as promised, they allegedly withdrew approximately $850,000 in pool participant funds from the Allied Markets forex account, spending more than $64,000 of the stolen funds on restaurants and entertainment; approximately $33,000 on travel, hotels and rental cars; and approximately $66,000 on rent for their residence in Jacksonville Beach, Florida. They also transferred at least $83,200 to their personal bank accounts and withdrew approximately $139,000 in cash from automated teller machines and at bank branches, the Complaint charges.

Defendants also used pool participant funds to pay purported trading profits and supposedly returned pool participants’ principal in the manner of a Ponzi scheme, according to the Complaint.

Specifically, according to the Complaint, the Defendants solicited members of the public to send them money for forex trading by fraudulently guaranteeing specific trading returns and by making material misrepresentations regarding their trading expertise and results, including that Defendants’ forex trading was generating large profits.

In its continuing litigation, the CFTC seeks full restitution to defrauded pool participants, disgorgement of any ill-gotten gains, a civil monetary penalty, permanent registration and trading bans, and a permanent injunction against future violations of the CEA and CFTC Regulations, as charged.

The CFTC appreciates the assistance of the Jacksonville Beach Police Department, the Jacksonville Sheriff’s Office, the Florida Office of Financial Regulation, the United States Marshals Service, and the National Futures Association.

CFTC Division of Enforcement staff members responsible for this action are Jonah McCarthy, Patricia Gomersall, Dmitriy Vilenskiy, Jonathan Robell, John Einstman, and Paul Hayeck.

For the official press release from the CFTC, click here.

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