The US Commodity Futures Trading Commission (CFTC) has charged five individuals and three companies associated with them for three interconnected $145 million forex trading Ponzi schemes, defrauding more than a thousand investors.
CFTC Busts $145 Million Ponzi Scheme
Announced on Thursday, the lawsuit named Marcus Brisco and his two companies, Yas Castellum LLC, Yas Castellum Financial LLC; Tin Quoc Tran; Francisco Story; Fredirick "Ted" Safranko; Michael Shannon Sims; and Utah-based SAEG Capital General Management LP.
A court order on 6 February already granted a statutory restraining order against the defendants and froze their assets, providing the CFTC access to their books and records.
The regulatory agency is seeking to recover the investors' funds and will slap civil penalties against the defendants. Further, it will move for permanent trading and registration bans and permanent injunction of further violation of the Commodity Exchange Act (CEA) and CFTC regulations.
Three Interconnected Fraudulent Schemes
According to the lawsuit filed in the District Court for the Southern District of Texas, Tran operated the fraudulent scheme from around April 2020 until the CFTC busted the operation recently. He received about $145 million from 913 pool participants, some intended for "trading either forex or margined or leveraged gold-U.S. dollar pairs." However, he misappropriated a portion of the funds to pay invoices, a loan, and individuals not involved with the commodity pool. He even subsidized his unrelated businesses with the funds collected from pool participants.
The regulatory complaint further detailed that, between October 2020 and May 2022, at least 43 pool participants transferred at least $470,780 to Yas Castellum LLC, controlled by Brisco, who misrepresented the company's historical records. Sims also assisted in transferring these funds to entities controlled by Tran.
Brisco closed Yas Castellum LLC to establish Yas Castellum Financial LLC in June 2022 and was engaged in a similar misrepresentation to his previous company. He collected over $1.5 million from at least 57 pool participants under the new company and again misappropriated the funds by transferring them to Tran-controlled entities. Brisco even paid himself purported trading profits that did not even exist.
The role of Story, Safranko, and SAEG came as they knowingly submitted false bank statements to the National Futures Association (NFA) to conceal Tran's fraudulent operations.
Meanwhile, CFTC and other regulators are actively busting investment frauds. Recently, the US Justice Department indicted the co-founders of the $340 million crypto Ponzi scheme, Forsage. Furthermore, last September, the Head Trader of EmpiresX plead guilty to his involvement in the $100 million fraudulent scheme.
