A big name on the US regulation scene has issued a judgement against an alleged foreign exchange fraudster which is expected to leave him liable to pay almost $3 million.
The Commodity Futures Trading Commission (CFTC), which monitors the US futures and swaps markets and licenses organisations to participate in it, said that it would hit Kevin Andre Perry with the fines for a variety of reasons.
Perry, who was named as a defendant alongside a company called Lucrative Pips Corporation, is accused of offering falsely high growth rates for his investment pool.
Now, the US District Court for the Northern District of Georgia has issued what is known as a default judgement. As a result, the defendant will have to pay a civil monetary penalty which amounts to over $2 million US dollars.
The defendants will also need to pay restitution, or refund the allegedly scammed cash, to the scheme’s alleged victims. This amounts to $694,799, the Commodity Futures Trading Commission said.
Neither defendant will be able to re-enter the market either, as they have been banned from trading in CFTC-regulated environments. They have also been told that they cannot register with the CFTC, and that they cannot engage in conduct which goes against the Commodity Exchange Act. These bans are permanent.
According to a statement from the CFTC, Perry allegedly told those looking to join his forex investment “pool” that any deposited funds would grow by at least 200% per cent over the course of two months or so.
This never transpired, and Perry allegedly lied to the customers again further down the line.
“In its motion for default judgment, the CFTC presented evidence that Perry fraudulently and repeatedly told prospective pool participants that the initial funds they gave to the defendants were fully ‘guaranteed’ against trading losses and that their accounts would grow in value approximately 200% to 350% in less than 60 days”, the statement read.
“When pool participants attempted to withdraw their funds at the end of their trading cycle, the defendants knowingly made false statements to explain why they could not return pool participants’ funds”, it added.
While the restitution order is designed to ensure that alleged victims receive as much money as possible, it depends on the financial situation of Perry and Lucrative Pips Corporation as to whether the funds are seen again.
“The CFTC cautions victims that restitution orders may not result in the recovery of money lost, because wrongdoers may not have sufficient funds or assets”, the statement went on to explain.
“The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable”, it added.
Four members of staff from the CFTC’s Division of Enforcement worked on the case.
Perry is also facing a charge of wire fraud in the criminal courts. This case was filed in December of last year and is now pending. This case will also be heard in the US District Court for the Northern District of Georgia.