Two men from the US have been charged with allegations of foreign exchange fraud of hundreds of thousands of dollars.
Thomas Lanzana, who also operated under the brands Unique Forex and Blackbox Pulse LLC, is one of them.
Lanzana is from the US state of South Carolina and has also lived in New Jersey.
The other is Nikolay Masanko, who operated the brand White Cloud Mountain, LLC. He is from St Augustine in the state of Florida.
The Commodity Futures Trading Commission, which regulates some of the US’ most prominent financial markets, has hit the pair with the charges after they were accused of soliciting customers for fraudulent forex deals.
They also face charges of misappropriating the deposits their traders trusted them with, and with also failing to register in the proper way.
It has been a fast-moving few days for the case, with many key events taking place.
The CFTC’s complaint was first made last week, and it was swiftly followed by a move from US District Court Judge Madeline Cox Arleo to freeze the pair’s assets. They will also not be permitted to hide or destroy any of their company records.
Details of the charges were released this week. The CFTC claims that the pair had interacted with 31, or possibly more, alleged victims over the course of a period beginning potentially as far back as 2013. In total, they received around $700,000 from those they allegedly tricked.
Investors were told that Lanzana was a well-regarded and successful investor himself, although that was not the case.
They also allegedly created fake statements to send to traders and are accused of not registering with the CFTC as they were supposed to under the law.
In a statement posted online, the CFTC went into greater detail about Lanzana’s own failings and his alleged duplicity.
“The Complaint alleges that Lanzana and Masanko misrepresented to prospective customers that Lanzana was a successful forex trader when he was not, and had instead lost more than $12,000 trading forex for his personal accounts from February 2013 to February 2017”, it said.
“To mask the truth, Lanzana and Masanko (1) sent false customer account statements to their customers, (2) posted false monthly account statements to their companies’ websites showing balances in excess of $800,000 for a forex trading account that did not exist, and (3) sent false tax documents to customers reporting earnings that did not exist, according to the Complaint”, it added.
The CFTC also accuses the pair of operating a partial Ponzi scheme by paying back some traders using new customer deposits.
“Lanzana used a portion of those funds to repay some investors in the manner of a Ponzi scheme and to pay for his personal expenses, including purchases on Amazon.com, payments to a luxury car dealer and a jewelry retailer, and golf expenses, among others, as alleged”, the CFTC said.
The CFTC is now seeking for the pair to pay out restitution money, civil monetary penalties and more. The two could also face trading bans for life.