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CFTC Charges Forex Trading Firms And Principals In $75 Million Fraud

Date 22/04/2019

The Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in federal court in Florida against Sarasota area defendants Oasis International Group, Limited (OIG), Oasis Management, LLC(OM), Satellite Holdings Company (Satellite), Michael J. DaCorta (DaCorta),Joseph S. Anile, II (Anile), Raymond P. Montie, III (Montie), Francisco “Frank” L. Duran (Duran), and John J. Haas (Haas) (collectively, defendants).  The defendants are charged with operating a $75 million foreign currency (“forex”) trading scheme involving over 700 U.S. participants and over $47 million misappropriated in order to return funds to certain participants and for personal use, such as exotic vacations, sports tickets, and college tuition.

Starting in 2011, according to the Complaint, the defendants fraudulently solicited and misappropriated money from over 700 U.S. residents for pooled investments in retail forex.  Between mid-April 2014 and the present, the defendants received approximately $75 million from pool participants for investment in two commodity pools—Oasis Global FX, Limited and Oasis Global FX, SA (collectively, the “Oasis Pools”)—that would purportedly trade in forex.  The defendants concealed their fraud by issuing false account statements to the pool participants.  The Complaint also names nine relief defendants, who are alleged to have received pool participant funds.

Court Freezes the Defendants’ Assets and Appoints a Temporary Receiver

On April 15, 2019, the Honorable Virginia Covington, U.S. District Court Judge for the Middle District of Florida, entered a restraining order freezing the assets of the defendants and the relief defendants and permitting the CFTC to inspect all relevant records of the defendants and the relief defendants.  The Court also appointed Burton W. Wiand as a temporary receiver to take control of the corporate defendants and relief defendants, as well as the assets of the individual defendants.  

CFTC Director of Enforcement Comments

Director of Enforcement James McDonald commented, “This action is among the latest examples of the CFTC’s coordination with other regulators and criminal authorities to aggressively and assertively root out fraud and bad actors involved in our markets.  We will continue to hold accountable not just companies, but also individual wrongdoers.”

The Defendants’ Forex Pool Fraud

As alleged in the Complaint, to entice pool participants, the defendants falsely represented that, among other things, pool participants would receive a minimum 12% guaranteed annual return; the Oasis Pools had never had a losing month; there was no risk of loss with the Oasis Pools; and forex trading returns for the Oasis Pools were 22% in 2017 and 21% in 2018.  The defendants misappropriated the majority of pool funds and lost the remainder trading forex. 

As further alleged, of the approximately $75 million the defendants received from pool participants between mid-April 2014 and the present, the defendants deposited only $21 million into Oasis Pools’ forex trading accounts and lost all of those funds trading.  The defendants used over $28 million to make Ponzi-like payments to other pool participants, as well as spending over $18 million for unauthorized personal or business expenses such as real estate purchases in Florida, exotic vacations, sports tickets, pet supplies, loans to family members, and college and study abroad tuition.  The defendants also allegedly created and issued false account statements to conceal their trading losses and misappropriation from pool participants by inflating and misrepresenting the value of the pool participants’ investments in the Oasis Pools and the Oasis Pools’ trading returns.      

In its continuing litigation against the defendants, the CFTC seeks disgorgement of ill-gotten gains, civil monetary penalties, restitution, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act, and CFTC Regulations, as charged.

The CFTC acknowledges and appreciates the cooperation and assistance of the Florida Office of Financial Regulation; the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigation Division; the U.S. Attorney’s Office for the Middle District of Florida; and the Cayman Islands Monetary Authority.

CFTC Division of Enforcement staff members responsible for this action are Elsie Robinson, Jenny Chapin, Alison Auxter, Jo Mettenburg, Christopher Reed, and Charles Marvine.

CFTC’s Forex Fraud Advisory 

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Foreign Currency Trading (Forex) Fraud Advisory, which alerts customers to forex fraud and lists simple ways to spot forex scams.

Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.