The Commodity Futures Trading Commission (CFTC) announced on Tuesday that it has received a consent order for its enforcement action against the defendants who pulled off a foreign exchange (forex) and cryptocurrency trading scam, defrauding investors of more than $7.2 million.
The primary accused of the case was Abner Alejandro Tinoco who ran a self-styled investment firm, Kikit & Mess Investments LLC, and misappropriated the funds received from the investors for managed trading activities.
The CFTC first charged Tinoco and his company in October 2010. Initially, the defrauded amount was estimated to be around $3.9 million, but later it was found to be more than $7.2 million.
The CFTC order imposed injunctive relief that include permanent bans on Tinoco and his company from trading and registration. Further, they were enjoined from future violations of the Commodity Exchange Act (CEA).
Additionally, the defendants have to provide restitution, disgorgement and a civil monetary penalty, but these figures will be decided by the regulator at a later date.
A Massive Fraud
Tinoco, with his company, has run the fraudulent investment scheme since at least September 2020, according to the CFTC. He managed to gather the funds from at least 322 clients with assurances of managing their customized trading portfolios in forex and cryptocurrency investments and solicited at least $7.2 million.
He did not even trade with the collected funds. Rather, he used the proceeds to finance his personal expenses including travel costs for chartering a private jet, the purchase of a luxury mansion and other real estates, and the purchase or lease of luxury automobiles.
Tinoco and his company even disguised returns by paying some of the investors with the funds collected from others, making it a classic Ponzi-styled scheme.
Meanwhile, the CFTC is actively busting fraudsters in the field of investment. Earlier this year, the agency settled a binary options fraud for $2.6 million and charged the promoters of another forex scam $58 million.
