Both cases serve as stark reminders of the risks associated with unregistered entities in the commodity pools and forex markets.

In a decisive move against fraudulent activities in the retail forex market, the Commodity Futures Trading Commission (CFTC) recently saw two major cases culminate in substantial judgments and penalties.

The CFTC has issued advisories to educate the public on identifying and avoiding such scams. They also encourage the public to verify the registration status of companies with the CFTC before committing funds, as part of their broader effort to combat financial fraud and protect investors.

Michael DaCorta’s Oasis duped 800 individuals out of $80 million

The first case, presided over by Judge Virginia Covington of the U.S. District Court for the Middle District of Florida, centered around Michael DaCorta, a Florida man convicted of orchestrating a significant retail forex fraud scheme. DaCorta, along with Oasis International Group, Limited (OIG), Oasis Management, LLC (OM), and Satellite Holdings Company (SHC), was found guilty of multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations.

The scheme, as outlined in the summary judgment order, involved DaCorta and his associates defrauding approximately 800 participants, leading them to send over $80 million to OIG, OM, and SHC for trading in leveraged, margined, or financed retail foreign currency transactions. The court mandated DaCorta to pay over $61 million in restitution and civil monetary penalties. This judgment reflects the gravity of his actions, emphasizing the need for severe penalties to deter similar future conduct.

The case also saw consent orders entered against several Florida and out-of-state residents involved in the scheme. These individuals, found complicit in the fraudulent operations, were ordered to pay substantial amounts in restitution and penalties. The court’s findings revealed a disturbing pattern of misappropriation and deceit, where funds intended for forex trading were used for personal extravagances, including luxury cars and residences.

Avinash Singh’s Highrise ordered to pay $102 million

The second case, under Judge Carlos E. Mendoza, also in the Middle District of Florida, involved Avinash Singh and his company, Highrise Advantage, LLC. In a default judgment, Singh and Highrise were found to have fraudulently solicited and misappropriated funds through a master commodity pool and four feeder pools. The judgment ordered them to pay over $102 million in restitution and penalties, a reflection of the substantial harm caused to investors.

The Highrise scheme was characterized by deceit and misuse of investor funds. While almost $58 million was collected, less than $2.5 million was actually used for forex trading. The majority of the funds were misappropriated or used to make Ponzi-type payments. False statements were issued to investors, painting a picture of profitability where there was none.

Singh faced additional criminal charges, including wire fraud and money laundering, underscoring the severity of his actions. The CFTC, in its ongoing commitment to customer protection, cautioned that such orders for repayment might not always result in recovered funds, due to the possible insolvency of the perpetrators. Nonetheless, the CFTC continues to vigorously pursue justice and accountability.