Alexandria, VA – September 27, 2006 – A federal court in Virginia has permanently banned Adam Leon and Joseph Marchiano from engaging in commodity trading following a CFTC investigation into fraudulent practices. The U.S. District Court for the Eastern District of Virginia issued the order on September 15, 2006, stemming from a complaint originally filed in May 2005.
The court found that Leon, the controlling person of Presidential FX, Inc., and Marchiano fraudulently solicited approximately $1.6 million from over 120 investors, both domestically and internationally, between December 2003 and February 2005. The scheme involved selling options on foreign currency using deceptive and high-pressure sales tactics.
Investigators revealed that Marchiano falsely claimed it was “absolutely impossible” to lose money investing with Presidential FX, despite company records showing consistent monthly losses. From December 2003 to June 2004, Presidential FX did not have a single profitable month, and 99.1% of its customers lost money during that period. The defendants also failed to adequately disclose the risks associated with foreign currency options trading.
As a result of the judgment, Leon and Presidential FX are jointly required to pay $1,596,100 in restitution to defrauded investors, alongside a $1,000,000 civil monetary penalty each. Marchiano is jointly liable for $267,660 of the restitution related to the customers he directly defrauded and must also pay a $450,000 civil monetary penalty. All three defendants are permanently prohibited from any future involvement in commodity-related activities.
The case was handled by CFTC’s Division of Enforcement, with Michael J. Otten, Mary Kaminski, Rachel Entman, Gretchen Lowe, and Lacey Dingman leading the investigation.
Source: CFTC.gov
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