Federal Court Orders $900,000 Fine Against Colorado Company for Forex Ponzi Scheme

The Commodity Futures Trading Commission (CFTC) updated on its website that the Colorado District Court entered a judgement against Venture Capital Investments LLC (VCI) and its principal and managers Breonna Clark, Eliot Clark and Alexander Pak (Clark) for fraudulently soliciting and misappropriating funds from clients in a digital asset and forex Ponzi scheme.

The Court orders VCI and Clark to pay $900K in a total in a digital asset and Forex Ponzi Scheme. To be more specifically, penalty of $450,302 in restitution to defrauded clients, penalty of $450,302 for a civil monetary. In addition, VCI and Clark is asked to pay for the CFTC.

What's more, the defendants are now permanently banned from engaging in conduct that violates the Commodity Exchange Act (CEA) and CFTC regulations, as well as restricted from registering with the CFTC and trading in any CFTC-regulated markets.

Background

The order stems from a complaint filed on February 14, 2020. The court ruled that the defendants fraudulently solicited more than 72 clients to invest in commodity pools that purportedly trade in forex and digital assets, including bitcoin, only to then misappropriate the money. 

Further, the court found that the defendants lured their clients primarily by using social media, touting the ability of their purported “master team of traders” to provide consistent trading profits. The court found that the defendants misappropriated their clients’ money to acquire, among other things, a luxury automobile. The defendants also used their clients’ money to make Ponzi-type payments to others to maintain the scheme. 

In total, the defendants fraudulently solicited and misappropriated $450,302.

The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.