A Florida court has appointed Melanie Damian from Damian & Valori LLP as a temporary receiver in the CFTC’s action against three individuals and their associated companies that were engaged in a fraudulent scheme to solicit retail investors for trading binary options, forex, and cryptocurrencies.
Melanie’s appointment almost immediately followed the filing of the CFTC’s complaint, alleging that the defendants had defrauded unsuspecting customers throughout the United States and elsewhere out of about $20 million.
The US derivatives regulator filed its fraud suit in the Southern District of Florida against Florida resident Daniel Fingerhut alongside Tal Valariola and Itay Barak, both from Tel Aviv. The trio was charged with operating an Israel-based marketing company, Digital Platinum Limited (DPL), as well as two associated entities that operated under the brands Digital Platinum, Inc. (DPI) and Huf Mediya Ltd. (Huf) in the US and Bulgaria, respectively.
The CFTC also obtained judgments against Aicel Carbonero as a relief defendant, to seize the funds she received from Fingerhut’s fraudulent activities. She claimed the money was part of a real estate transaction, but the CFTC said Carbonero failed to provide any evidence to support her claims.
“Carbonero did not provide any legitimate services to AIP or Digital Platinum Defendants and does not have any interest in or entitlement to Fingerhut’s home,” the court papers state.
When Fingerhut realized the scheme was over, he apparently “quit-claimed” the deed to his house for $10 to Carbonero.
A relief defendant is a person or entity who has received funds or assets as a result of the illegal acts of the other named defendants. He/she is typically named because the plaintiff seeks injunctive relief to protect the sought funds or assets and apply them to any eventual recovery in the case.
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The CFTC is pursuing enforcement against these defendants who were accused of producing misleading promotional content that was viewed millions of times and caused nearly 60,000 people to open accounts to trade binaries, forex, metals, cryptos, among other assets, with their unregulated brokers.
The collective scheme involved fraudulent ad campaigns that relied on other marketers, known as “affiliates,” to promote trading systems and websites. They attracted their victims by sending misrepresentations about the trading platforms, also paying video producers to make fraudulent testimonials promoting the trading systems.
Customers who fell victim to the binary options and digital assets campaigns were required to deposit at least $250 initially.
While the CFTC describes the defendants’ ads as ‘pure fiction,’ the people in the videos told viewers that they were “enjoying rich lifestyles from trading binary options” and purported to show them that their trading balances increase automatically in live accounts.
The complaint further reveals that Daniel Fingerhut offered to cooperate with the CFTC investigations into the affiliate marketing fraud, also prepared a sworn declaration, and testified as a witness against his former colleagues. But rather than truthfully cooperate, he made false and misleading statements to the CFTC staff to conceal the extent of his role in the fraud and avoid submitting relevant documents and information.
Now, the watchdog is looking to trace and recover funds and order the scam operatives to disgorge their ill-gotten gains. It also seeks to impose monetary penalties against the three and to bar them from doing any sort of commodities-related business.
In its press release, the CFTC thanked Israel Securities Authority for their assistance but cautioned that it might not be able to recover victims’ money.