Barrington, Illinois resident Dro Kholamian and his firm, Blue Star Trading, LLC, are facing civil charges from the Commodity Futures Trading Commission (CFTC) alleging a multi-year forex and commodity futures fraud. The CFTC filed a complaint detailing a scheme to defraud clients out of at least $775,000, with potential losses exceeding $1.9 million from over 30 investors.
According to the complaint, Kholamian solicited funds from individuals, many of whom he knew through the local Armenian community, promising a 10-20% return on a $25,000 investment within one year. He claimed to be actively trading forex and commodity futures on behalf of his clients, assuring them funds were readily available for withdrawal. However, the CFTC alleges Kholamian largely misappropriated client funds, using them for personal and business expenses, cash withdrawals, and to make payments to earlier investors – effectively operating a Ponzi scheme.
The CFTC alleges Kholamian routinely ignored client requests for withdrawals, fabricating reasons for delays, such as claiming to be “tied up in trades.” When pressed, he allegedly issued checks from Blue Star’s account knowing they would bounce due to insufficient funds. The scheme is believed to have operated from at least January 2013 through the present.
On November 30, 2018, Judge Sara Ellis of the U.S. District Court for the Northern District of Illinois issued a Statutory Restraining Order, freezing the assets of Kholamian and Blue Star. A Consent Order for Preliminary Injunction was entered on December 13, 2018, continuing the asset freeze and prohibiting further violations of the Commodity Exchange Act and its regulations.
The CFTC is seeking full restitution for defrauded clients, disgorgement of ill-gotten gains, a civil monetary penalty, permanent registration and trading bans, and a permanent injunction against further violations. The investigation is ongoing.
Source: CFTC.gov
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