CFTC Fines Man and His Wife on $13 Million Investment Fraud

Two Washington residents who operated a futures trading scam that solicited more than $11 million from US investors were hit with a $1.25 million fine to settle criminal charges in an enforcement action filed by the CFTC CFTC The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss Read this Term.

According to federal investigators, Sung Hong (aka Laurence Hong) and his wife Hyun Joo Hong (aka Grace Hong) introduced themselves as experienced traders with a track record of performance to solicit investors for their hedge fund, Pishon Holdings. The couple also offered their asset management service as investment advisors through separately managed accounts.

Sung, 47, and Hyun Joo, 42, not only set up their phony hedge fund but also lied about returns they were able to get on previous investments and about their certifications and qualifications to attract gullible investors.

Fraud focused on religious congregations

Lawrence Hong, according to court records, continued defrauding people even after he had already served three years in federal prison on an earlier investment scam. And in a parallel criminal case, the CFTC said he and his wife pleaded guilty to conspiracy charges including Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term and wire fraud. In this much bigger scam, they admitted posing as an investment adviser and cheating clients out of nearly $13 million.

“On October 11, 2018, Laurence Hong was sentenced to a 180-month prison term and Grace Hong was sentenced to a 72-month prison term,” the agency said.

The CFTC further states that the pair used their faith to get church members to trust them to invest. One church invested $1 million and lost $300,000 in a single trade. Still, despite the steep losses, the Hongs withdrew almost $150,000 from the church’s account as advisor fees.

The investigation revealed that investor money was used to pay for the couple’s lavish lifestyle, which included a 45-foot yacht and luxury cars such as BMW, Maserati, and Lamborghini.

However, the watchdog cautioned victims that restitution orders “may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets.”