DETROIT, MI – Ali Bazzi of Michigan has been accused of defrauding investors out of at least $470,000 through a foreign currency (forex) commodity pool operated by his company, Welther Oaks, LLC. The Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the Eastern District of Michigan on August 17, 2021, alleging fraud and misappropriation.
According to the CFTC complaint, beginning in March 2018, Bazzi and Welther Oaks allegedly solicited funds from at least 25 investors with false promises of guaranteed profits of up to 15% monthly, with no risk of loss, and full access to their funds. The agency claims that only a small portion of the collected funds were actually used for forex trading.
Instead of trading, the CFTC alleges Bazzi and Welther Oaks concealed their activities by providing fabricated account statements showing false profits. At least $387,000 of investor funds were allegedly misappropriated by Bazzi for personal expenses, including automobiles, jewelry, retail purchases, meals, entertainment, and travel.
In a parallel criminal case filed in the U.S. District Court for the Eastern District of Michigan (U.S. v. Bazzi, 2:21-cr-20348-DML-DRG), Bazzi pleaded guilty on the same day the CFTC filed its civil complaint.
The CFTC is seeking disgorgement of ill-gotten gains, civil monetary penalties, restitution for investors, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations. The agency cautions that recovery of funds for victims is not guaranteed.
The CFTC acknowledged the assistance of the U.S. Attorney’s Office for the Eastern District of Michigan and the FBI’s Detroit Field Office in the investigation. Staff members Joseph J. Patrick, Jon J. Kramer, David A. Terrell, Scott R. Williamson, and Robert T. Howell led the case for the Division of Enforcement.
The CFTC has issued warnings about forex trading fraud and urges the public to verify a company’s registration before investing. Reports of suspicious activity can be made to the CFTC via its toll-free hotline (866-FON-CFTC), online tip form, or through the Whistleblower Office.
Source: CFTC.gov
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