A repeated perpetrator of forex fraud had his unscrupulous dealings come to an end, for at least the next 15 years, according to a prison sentence handed down by a US federal court, and announced by the FBI and US department of Justice (DoJ) in an official press release dated January 15th, 2014.
The offender in question, Aleksander Efrosman, 51 years of age, was an investment manager of Century Maxim Fund, Inc. and AJR Capital, Inc., and was sentenced to a term of imprisonment of 188 months following his conviction for wire fraud, as per the press release. The announcement follows a string of cases and after the CFTC filed a complaint against the offender and his two firms – in 2006- which at the time had their regulatory status with the National Futures Association (NFA), and includes a case document citing prior prison terms served by the repeat offender in the CFTC compliant.
Efrosman had fled the United States but was later extradited from Poland and pleaded guilty on October 18, 2012, as the international fugitive could “run but not hide,” paraphrasing the quote provided below by one of the key attornies in the case.
Ex-boiler Room Globetrotter Reminiscent of a Hollywood Movie
From January 2004 through June 2005, working from offices in Brooklyn and Staten Island, Efrosman defrauded investors by soliciting investments purportedly for the purpose of trading in the stock market and the foreign currency exchange market, noted in the press release. Efrosman had falsely told investors that he had a history of profitable trading and that the investments would be protected by a “stop-loss” mechanism which ensured that no trade lost more than 3 percent. Based on these misrepresentations, Efrosman raked in over $5 million from more than 100 investors, noted in the release. However, Efrosman did not invest the funds as promised, but instead used the funds for his personal benefit, including gambling over $3 million at Foxwoods Casino in Connecticut .
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Efrosman fled the United States in 2005 with millions of dollars of investor funds. He first traveled to Cozumel, Mexico, then to Panama and ultimately to Poland, where he assumed the identity of “Mikhail Grosman” and obtained a high-quality fraudulent Russian passport. In the meantime, federal agents in the United States pursued leads as to Efrosman’s whereabouts, and in a coordinated multinational effort, law enforcement authorities in Austria, the Czech Republic and Poland, tracked, located and ultimately arrested Efrosman in Krakow, Poland on May 28, 2010.
The story is reminiscent of a Hollywood movie, and loosely similar in context to the ‘Wolf of Wall ‘ movie that has recently attracted attention, or even the “Catch Me If You Can” movie from 2002 played by leading actor Leonardo DiCaprio, as the regulatory landscape over the last twenty years has made it more difficult for such boiler room operations or wire fraud schemes to succeed in their malicious efforts to defraud investors. However, I would imagine the wild-goose chase that Efrosman started, after trying to evade regulators, was not as entertaining to victims of his scheme. Nonetheless, thanks to good political ties with Poland and the U.S, the extradition was successful, otherwise the investigation could still been ongoing – as in other countries where such fugitives are still at large.
“You Can Run, But You Can’t Hide”
Commenting in the official press release, US Attorney Loretta Lynch, who had been appointed by U.S. President Barack Obama, expressed her views about the notorious globetrotter caught on the run, “This case proves the old adage: ‘You can run, but you cannot hide.’ Aleksander Efrosman stole over $5 million from unsuspecting investors and fled the country, then engaged in a globetrotting effort to escape justice. But the coordinated efforts of law enforcement resulted in his capture. Today, Efrosman has finally been held to account for his betrayal of his clients’ trust.”
Ms. Lynch concluded in the statement, while expressing thanks to the cooperating bureaus involved, “As proved again today, this office will relentlessly pursue and prosecute the perpetrators of investment fraud schemes.”
The sentencing was imposed by United States District Judge Nicholas G. Garaufis at the federal courthouse in Brooklyn, New York, and in addition to the nearly two decade prison term, Efrosman was ordered to pay restitution of approximately $4 million.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director in Charge of the Federal Bureau of Investigation, New York Field Office; and Philip R. Bartlett, U.S. Postal Inspector in Charge, New York Division. The government’s case was prosecuted by Assistant United States Attorney Daniel Spector.