Court orders defendants to pay more than $4 million in customer restitution and penalty and permanently bars them from the commodities industry
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge Marcia G. Cook, of the U.S. District Court for the Southern District of Florida, entered an order of default judgment and permanent injunction against Juvenal Eduardo Machado (Machado) (aka Juvenal Eduardo Machado Bogadi, Edward Kaufman, and Eduardo Machado), whose last known address in the United States is Miami, Fla., and his company, Invers Forex, LLC. Neither defendant has ever been registered with the CFTC.
The order stems from a CFTC enforcement action filed on June 23, 2011, that charged the defendants with defrauding customers in an off-exchange foreign currency (forex) scam and with misappropriating customer funds (see CFTC Press Release 6057-11).
The order requires Machado and Invers Forex jointly and severally to pay a $3.92 million civil monetary penalty and restitution of $201,613. The order also imposes permanent trading and registration bans against the defendants and prohibits them from violating the Commodity Exchange Act, as charged.
The order finds that beginning in December 2008, and continuing to at least March 2010, Machado and Invers Forex fraudulently solicited least $717,100 from at least 28 persons, including Machado’s friends, neighbors, and church members, to trade forex on their behalf. According to the order, many of Machado’s prospective customers attended prayer meetings in his home, where Machado touted his forex trading experience and ability. The order finds that Machado told customers and prospective customers that God had put him on the earth to help people financially, or words to that effect, and that by trading forex contracts for them, he could give them financial freedom for the rest of their lives.
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The order also finds that as part of his solicitation, Machado offered prospective customers guaranteed “interest” (i.e., profits) on their investments of five percent or more per month and falsely represented to at least one prospective customer that he had never lost money trading forex.
Of the $717,100 that customers provided to the defendants to trade forex, the defendants lost $120,117 trading forex, returned $395,370 to customers as purported profits, and misappropriated the remaining $201,613, the order finds.
In May or June 2010, without returning all of the customers’ remaining funds, Machado moved from his home in Miami, Fla., to Ontario, Canada, and his customers have not been able to contact him, according to the order.
The CFTC appreciates the assistance of the United Kingdom’s Financial Services Authority.
The CFTC Division of Enforcement staff members responsible for this case are Matthew Elkan, Michael Loconte, Erica Bodin, Dan Jordan, Rick Glaser, and Richard Wagner.