CFTC Obtains Default Judgment against Barki LLC in a $38 Million Forex Ponzi Scheme

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that the U.S. District Court for the Western District of North Carolina entered an order of default judgment and permanent injunction against Barki, LLC of Mint Hill, N.C.

The order, entered on September 30, 2011, stems from a CFTC enforcement action filed on March 17, 2009 that charged Barki and Bruce C. Kramer (Kramer) with fraudulent solicitation and misappropriation in a $38 million leveraged foreign currency (Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term) 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 perpetrated by Kramer (see CFTC New Release 5635-09, March 18, 2009).

The court’s order imposes restitution of $19,960,649 and a civil monetary penalty of $20,944,707 on Barki and imposes permanent trading and registration bans against Barki, among other sanctions. The order also requires relief defendant Forest Glen Farm, LLC of North Carolina, a company Kramer registered to purchase his residence and a horse farm, to disgorge $1.35 million in ill-gotten gains it received as a result of Kramer’s fraudulent conduct.

In addition, the CFTC obtained a federal court consent order from the same court requiring disgorgement from relief defendant Rhonda Kramer (R. Kramer) for any customer funds she obtained through Kramer’s fraudulent conduct. The consent order, entered on September 27, 2011, recognizes that the Receiver appointed by the court in this case had collected funds from R. Kramer which satisfies her disgorgement obligations under the consent order.

The Default Order Finds that Kramer Fraudulently Solicited Least $38 Million from 79 Customers by Touting his Success in Trading Forex

The default order finds that, from June 2004 through February 2009, Kramer fraudulently solicited at least $38 million from 79 customers by touting his success in trading forex. Of the $38 million solicited, Kramer deposited approximately $17.5 million for trading forex and sustained trading losses of $10 million, the order finds. Kramer used the bulk of the funds to pay purported profits and to return principal to customers, and for extravagant personal uses, such as a 48-acre horse farm, a 6,000 square foot residence, artwork, luxury automobiles including a Maserati, and extravagant parties, the order finds. Kramer concealed his fraud by issuing false account statements to customers. His fraud became known upon his death in February 2009.

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