Daily fraud update: 25th October

CFTC charges man over alleged forex scam

A regulator in the US has told a man who allegedly misappropriated foreign exchange trading funds that he will face a civil enforcement action.

Eyal Alper, who is from the state of New York, has been hit with accusations by the Commodity Futures Trading Commission (CFTC) that he solicited traders to deposit forex contract funds with him on a fraudulent basis.

The CFTC further alleges that Alper then misused $280,000 of these funds.

In a statement, the CFTC shared further information about the way the alleged scam unfolded.

“According to the complaint, Alper improperly commingled the customers’ funds with his own funds, never opened trading accounts for his customers as promised, and sent false statements to his customers reporting purported profits in the fictitious accounts”, it said.

“In its continuing litigation against Alper, the CFTC seeks restitution to defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against future violations of federal commodities laws, as charged.”

The organisation also thanked the UK’s Financial Conduct Authority for assisting in the matter.

People behind Blue Bit hit by fines

Two men who ran an allegedly fraudulent set of internet trading brands have been hit with multi-million dollar fines.

The US District Court for the Eastern District of New York told Blake Kantor and Nathan Mullins that they would need to pay $4.6m in fines as a result of their alleged fraud, carried out through the brands Blue Bit Banc and Blue Bit Analytics.

Blue Bit has been hit by a number of claims in recent months.

Kantor, who also goes by the alias Bill Gordon, has already pleaded guilty for part of the alleged scam.

The scam was partly crypto-oriented, and it involved binary options – a notorious form of trading which has been largely discredited by the wider industry.

Kantor is currently serving a prison sentence.

In a statement released at the time of the sentencing, the Commodity Futures Trading Commission said that it would carry on working in partnership with other agencies to bring people like Kantor to justice.

“The CFTC is committed to working vigorously to root out fraud in all of our markets, including those involving virtual currencies”, said the CFTC’s director James McDonald.

“As this parallel action shows, we will continue to work with our law enforcement partners to ensure that those who engage in this sort of misconduct are identified and held accountable. I am grateful to the U.S. Attorney and his team for their work on this important case.”

The Attorney who worked on the case on behalf of the government added that Kantor had now been “held accountable for defrauding investors through his lies and deceit”.

“This Office and our law enforcement partners will continue to vigorously prosecute those who perpetrate financial frauds and obstruct investigations of their crimes”, he added.

Denise Jacksone

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