FX Ponzi Scheme Deceived 1,500 Individuals with False Promise of 325% Returns

The Securities and Exchange Commission (SEC) has filed charges against a Florida resident, Sanjay Singh and his logistics firm, Royal Bengal Logistics Inc. The accused is charged with fraudulently raising an estimated $112 million from nearly 1,500 investors in an unregistered securities offering and running a foreign exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term (FX) scam.

Singh is accused of embezzling at least $14 million and transferring $19 million to two separate brokerage accounts. Despite promising investors very high returns, he lost more than $1 million of their money. This loss was due to Singh's involvement in risky and speculative stock margin trading.

SEC Charges Florida Resident for Operating $112m Forex Scam

The SEC's complaint details that from 2019 through 2023, Singh, via Royal Bengal Logistics Inc., offered high-yield investment programs that reportedly promised returns ranging from %12.5 to 325%. Singh and Royal Bengal allegedly assured investors that their funds would be used for business expansion and enhancing their fleet of semi-trucks and trailers. The defendants claimed that their investment plans were safe and that Royal Bengal was earning up to $1 million in revenue per month.

However, contrary to these claims, the SEC asserts that Royal Bengal was operating at a loss, and about $70 million of fresh investor funds were used for Ponzi-like payments to other investors. Singh is further accused of misappropriating at least $14 million of investor funds for personal use.

"As alleged in our complaint, Singh targeted many members of the Haitian-American community to raise money in a Ponzi-like scheme to enrich himself," Eric I. Bustillo, the Director of the Miami Regional Office of SEC, commented. "We are committed to holding accountable individuals like Singh who prey on investors through lies and deceit."

We announced charges against Florida resident Sanjay Singh & his trucking & logistics company, w/ fraudulently raising about $112M from as many as 1,500 investors through an unregistered securities offering that primarily targeted Haitian-Americans.https://t.co/TCRN6xQ0sc

— U.S. Securities and Exchange Commission (@SECGov) June 26, 2023

Legal Consequences and Preventive Measures

The Southern District of Florida's US District Court has accused Singh and Royal Bengal of breaking federal securities laws, specifically rules around registration and preventing fraud. Sheetal Singh, Sanjay Singh's wife, and Constantina Celicourt, the wife of the Vice President of Business Development at Royal Bengal Logistics, are also involved in the case as relief defendants.

Following an urgent request from the SEC, the District Court has approved preliminary measures. These include preventing further illegal activities (injunctive relief), freezing assets, and an order that prevents the destruction of relevant documents.

The SEC is pursuing additional enforcement actions. This could lead to Singh being barred from serving as an officer or a director, permanent injunctions, civil financial penalties, and the return of unlawfully obtained money with added interest.

Ponzi Schemes Are the SEC's Bread and Butter

Financial pyramids and Ponzi schemes are among the most common forms of fraud in the United States, often leading to significant profits for scammers but even more considerable losses for deceived investors. Due to the prevalence of these schemes, the SEC remains highly active in tracking them down, imposing multi-million dollar penalties on their creators.

A few months ago, the SEC shut down BKCoin for operating a scheme resembling a Ponzi structure. This crypto hedge fund based in Miami swindled at least 55 investors after accumulating $100 million. Earlier, the US Commodity Futures Trading Commission (CFTC), a counterpart to the SEC, brought charges against five individuals and three associated companies for three forex trading Ponzi schemes amounting to $145 million.

In February, US authorities accused four co-founders of another cryptocurrency Ponzi scheme Ponzi Scheme A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and Read this Term, Forsage. This scheme collected around $340 million through its decentralized finance (DeFi) investment platform. The founders were indicted for conspiracy to commit wire fraud, a crime that carries a maximum prison sentence of 20 years.

Forex market financial pyramids are also a problem in other jurisdictions. At the same time, the Australian Securities and Exchange Commission (ASIC) announced that David Sipina, a former director of Courtenay House, was criminally charged in relation to a $180 million forex Ponzi scheme. The harshest punishment he could receive for his actions is a ten-year prison sentence and a fine of $810,000.