The United States Commodity Futures Trading Commission (CFTC) has charged William Kuo Ichioka with defrauding investors out of hundreds of millions of dollars by claiming to be a digital asset and foreign exchange (forex) trader.
According to an official statement, the CFTC filed a complaint against Ichioka in the U.S. District Court for the Northern District of California, charging him with misappropriation of over $21 million of investor assets and misappropriation of profits in a Ponzi scheme. Accused of using new customer funds. ,
CFTC charges man with defrauding investors
The commodities regulator said Ichioka promised lakhs from over 100 individuals and entities to engage in forex trading through a commodity interest pool he operated as Ichioka Ventures. While advertising the services on his website, Ichioka claimed that the promised returns were in line with his track record as he was a self-made investor who was already making millions of dollars.
Based on his trading strategies, Ichioka promised participants of his scheme 10% returns every 30 business days. However, they suffered heavy losses. To conceal the losses, they provided forged documents and falsified details of the accounts to the participants to inflate the funds in the commodity interest pool accounts. The alleged fraudsters also paid alleged profits to investors using funds from other participants.
Despite Ichioka’s claims, he was, in fact, misappropriating clients’ funds for personal expenses. He mixed the participants’ assets with his own and used them to buy luxury items such as jewellery, cars and watches.
Parallel Action by the SEC and the DOJ
The CFTC accused Ichioka of running an “old-style” Ponzi scheme and engaging in “garden-variety” fraud. The alleged fraudster has offered a settlement to resolve the commission’s allegations. On the other hand, the agency is seeking a court order to impose business and registration ban and monetary penalty on Ichioka.
“Investor education and enforcement action are critical to our efforts to prevent fraudsters from defrauding hard working investors. Accordingly, I encourage all members of the public to stay informed about potential scams and abuses in the digital asset markets by visiting our Investor Advisory page. Commissioner Kristin N. Fraudsters offering guaranteed or abnormally high returns, or both, should especially investigate promptly and do additional due diligence before transferring any funds, Johnson said.
Meanwhile, the US Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) have launched parallel investigations into Ichioka’s actions, and are set to settle them soon.
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