The Commodity Futures Trading Commission (CFTC ) announced on Monday that it has charged The W Trade Group LLC, Larry Ramos Mendoza of Miami, Florida, and Joseph Carvajales also of Miami, Florida with fraud and misappropriation of more than $19 million involving futures, forex and options.
The CFTC claimed that W Trade Group LLC, acting under Ramos’ control, operated a long-running scheme from June 2013 through June 2020 that defrauded futures, forex and options investors. The regulator found out that W Trade Group and Ramos misappropriated over $19 million from at least 220 customers. In order to enhance their scheme, W Trade Group and Ramos allegedly sent false account statements to investors electronically indicating purported trading activity and profits, which did not exist in reality.
In addition, the CFTC mentioned that Carvajales, together with W Trade Group and Ramos, solicited customers by falsely guaranteeing returns on investment, falsely promising high returns on investments, and making false representations about the risk associated with the investments.
The agency filed a civil enforcement action against the culprits on Monday at the U.S. District Court for the Southern District of Florida. The commission is seeking restitution for defrauded customers, disgorgement of ill-gotten gains, trading and registration bans, civil monetary penalties, injunctions against further violations of the Commodity Exchange Act (CEA) and CFTC regulations.
Recognizing Commercial Fraud
This is not the first time the CFTC is charging criminals with investment scams. In several cases, the regulator has uncovered investment scams where fraudsters touted digital assets and trading businesses. Last month, the CFTC charged five individuals and five firms for a massive forex scam involving more than $58 million. Also, last month, the agency charged a Florida resident and his investment company with fraud for allegedly defrauding customers in their commodity pool out of $9.8 million. Therefore, investors are urged to be on the lookout for warning signs of investment fraud such as ‘guaranteed’ high investment returns, complicated language and jargon that is difficult to understand, unlicensed sellers, unsolicited offers and pressure to buy right now.
