U.S. CFTC Sues Cash FX Group and Executives, Alleging $950 Million Forex Ponzi Scheme

BlockBeats news, September 26 - The U.S. Commodity Futures Trading Commission (CFTC) announced on September 25 that it has filed a lawsuit in the U.S. District Court for the Middle District of Florida against Cash FX Group and its CEO Huascar Jose Lopez Castillo, The Conversion Pros and its CEO Ronald Pope, as well as Justin Halladay.

The CFTC alleges that the defendants operated a multi-level marketing Ponzi scheme, illegally soliciting more than $950 million from the public, including U.S. residents, claiming that the funds would be used to trade retail forex contracts and promising investment returns of up to 15% per week.

The CFTC stated that Cash FX actually conducted only a small amount of forex trading, misappropriated almost all participant funds, and used funds from new participants to pay fake trading profits to other participants, while paying millions of dollars to the defendants. The company also maintained the scheme by providing false account statements.

The CFTC said that participants have lost at least $406 million, and is seeking restitution, disgorgement of ill-gotten gains, civil monetary penalties, trading and registration bans, and a permanent injunction prohibiting the relevant defendants from further violating the Commodity Exchange Act and CFTC regulations.