CFTC Charges New Jersey Couple with $600,000 Forex Pool Fraud

The couple is also accused of mail and commodities fraud in a related criminal action.

A New Jersey couple who purportedly owned a hedge fund was hit with criminal charges for allegedly collecting money from several investors and spending it on a lavish lifestyle.

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The U.S. Commodity Futures Trading Commission (CFTC) today filed a lawsuit against Alcibiades Cifuentes and Jennifer Wee Cifuentes, charging them with operating a ‎fraudulent scheme that offered forex and commodity futures transactions.

Specifically, the U.S. derivatives regulator alleged in its complaint that from April 2013 through March 2015, Cifuentes and Wee engaged in a fraudulent scheme that netted nearly $600,000 from victims. ‎While they were actually running a Ponzi scheme, Cifuentes and Wee claimed that these funds would participate in a commodity pool for trading in a portfolio of ‎financial instruments including forex, commodities and other investments.

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In connection with the promotion of their pool, the defendants, using a demonstration account, made a series of materially false claims to lure investors interested in ‎forex trading. The claim was made that pool participants could get extraordinary investment returns.

Instead ‎of using the investors’ monies in trading, the fraudsters allegedly ‎misappropriated all of the pool participants’ funds, which was largely spent on ‎personal expenses such as luxury vehicles, jewelry and clothing among other items. As also ‎alleged, they used some new investors’ funds to pay back other investors in a Ponzi-‎like fashion, so that they would invest or refer additional money, thereby ‎allowing the scheme to continue for a longer period of time. ‎

As a result of the actions the commission seeks full restitution to ‎defrauded participants, disgorgement of any ill-gotten gains and a civil monetary ‎penalty. In addition to the fiscal penalties the CFTC seeks “permanent registration and trading bans, and a permanent injunction against future violations of federal commodities laws,” as charged.

Meanwhile, the couple is also accused of mail and commodities fraud in a related criminal action brought by the U.S. Attorney’s Office for the District of New Jersey. The mail fraud charge that both defendants face carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice. Further, the commodities fraud charge could net each a decade in prison and a fine of $1 million.

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