Five Florida Residents Charged in $1.7 Million Ponzi Scheme

Federal authorities charged five Florida residents, their company, and a sixth Mexican national with operating a $1.7 million Ponzi scheme disguised as a foreign currency trading operation.  The U.S. Commodities and Futures Trading Commission ("CFTC") filed a complaint against Alpha Trade Group S.A., also known as Revolution Network Ltd., of Panama; Jose Cecilio Martinez Beltran, Welinton Bautista Castillo, Maria Alvarez Gutierrez, Yehodiz Padua Valentin, and Maria Asela Rodriguez, all of Orlando; and Francisco Amaury Suero Matos of Mexico.  All were charged with various violations of anti-fraud provisions of the Commodity Exchange Act.  The CFTC is seeking relief including a ban of engaging in commodities-trading operations, disgorgement of ill-gotten gains, restitution to victims, and civil monetary penalties.

The Defendants, through Alpha Trade Group a/k/a Revolution Network Ltd. ("ATG"), solicited approximately $1.7 million from investors for placement in various commodity trading pools, including Orsa Investment Group and Online Marketing Solutions.  According to ATG, investor funds would be used to trade foreign currency and commodity futures contracts.  Potential investors were told that their investment was risk-free, and were guaranteed monthly returns ranging from 12.5% to 25%.  Investors were provided with promissory notes in exchange for their investment, and also received fictitious account statements on ATG's website showing the purported returns.  Yet, according to authorities, no commodities trading occurred in the United States, and only a small fraction of investor funds were sent to a third-party to engage in commodities trading.  Nearly $750,000 was issued back to investors in the form of investment returns or principal withdrawals, and the remainder is alleged to have been misappropriated by the defendants.  

The U.S. Department of Justice previously initiated a civil forfeiture action seeking the return of obtained approximately $316,000 in funds traceable to wire fraud offenses.  On July 27, 2010, a court entered a judgment and ordered the forfeiture of the funds, which were then returned to defrauded investors.

A copy of the CFTC Complaint is here.