The U.S. Commodity Futures Trading Commission (CFTC) has filed a complaint against four individuals who are allegedly defrauding hundreds of investors of millions of dollars.
Rene Larralde, Alisha Ann Kingrey, Brian Early, and Juan Pablo Valcarce were identified in the CFTC complaint to have falsely misrepresented to victims that they possessed a proprietary tool and a “secret sauce” for generating consistent profits in trading digital currencies.
The suspects used Fundsz, an unincorporated entity, to mask their operations, claiming they netted up to 3% in weekly profits, according to the regulator. The individuals added that aside from trading in digital currencies, they dabbled in precious metals, making “on-time and accurate payments” for seven years.
Victims were lured with an additional claim that a one-time $2,500 investment could balloon into $1 million in 48 months. The suspects, located in Florida, Louisiana, and Arkansas, also posed as a charitable cause that would “support clean water, humanitarian, health, education, and disaster relief efforts.
In its submission, the CFTC claimed that Fundsz did not make any digital currency or precious metals trade but instead made up “fictional” weekly reports to defraud investors.
The CFTC has since moved to freeze the defendant’s assets on August 2, leading to the appointment of a temporary receiver for Fundsz. The commission disclosed that it would pursue further legal action against the suspects, including disgorgement of ill-gotten gains, civil monetary penalties, and permanent bans from commodity trading.
“The CFTC continues to root out individuals who defraud customers in the cryptocurrency and precious metals markets,” said Ian McGinley, Director of Enforcement.
“Though the products fraudsters purport to trade and their methods of attracting victims—in this case through social media—may have changed, the old adage ‘if something sounds too good to be true, it probably is’ remains as valid as ever,” McGinley added.
Despite the flurry of legal reliefs available to the CFTC, McGinley stated that victims may not be able to receive the total worth of their investments as recovered funds may be grossly insufficient.
CFTC on the offensive vs bad actors
Apart from its crusade against industry behemoths, the commodities regulator is also waging war against smaller entities defrauding U.S. investors. Since the start of 2023, the CFTC has notched several enforcement actions against erring individuals, recovering millions of dollars from digital asset scammers.
The commission is also acting preemptively by issuing several fraud advisories to the general public. The public warnings contain tell-tale signs for investors to watch out for and offer helplines to report fraudulent activities.
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