CFTC Requests for Entry of Default against Head of $14.5M Forex Ponzi Scheme

Fazzaco learned that the United States Commodity Futures Trading Commission (CFTC) has requested for entry of default against the entities and individuals involved in a $14.5 million binary options and retail Forex Ponzi scheme.

A set of documents filed by CFTC at the California Eastern District Court show that the Court has granted CFTC's request for entry of default against John D. Black, founder and control person of Financial Tree, Financial Solution Group, and New Money Advisors, LLC. The CFTC explains that, despite previously claiming a desire to aggressively participate in this litigation, Black did not timely answer or otherwise respond to the complaint.

Wanna be the Next Cover Person of Fazzaco Magazine?​

In July 2020, the CFTC filed a civil enforcement action against Black, his affiliated entities and his associates Christopher Mancuso and Joseph Tufo. According to the complaint, the defendants misappropriated over $11 million to make payments to certain pool participants in a style consistent with a Ponzi scheme, and for personal use, such as personal travel, home renovations, limousine expenses, spa and haircare expenses, online gambling, and expenses relating to divorce and spousal support.

The complaint alleges that the defendants fraudulently solicited more than $14.5 million from at least 91 members of the public—including more than 50 U.S. residents—for pooled investments in binary options and Forex, misappropriating the vast majority of those funds. The defendants have sought to conceal their fraud by issuing false account statements to the pool participants and making phony excuses to them for their failure to return funds and deliver promised profits.

The regulator seeks disgorgement of ill-gotten gains, civil monetary penalties, restitution, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations.