New York, NY – April 12, 2007 – Anthony DiNapoli and John Messina have been penalized by the U.S. Commodity Futures Trading Commission (CFTC) for their involvement in a multi-million dollar forex fraud scheme. The case, part of “Operation Wooden Nickel,” a joint effort with the FBI, Department of Justice, and Securities and Exchange Commission, resulted in over $14 million in sanctions against nine defendants, building on previous penalties totaling over $25 million against 15 others in late 2006.
The CFTC initially filed civil injunctive actions against the defendants on November 18, 2003, alleging fraud in the sale and solicitation of illegal foreign currency (forex) futures contracts. The court found that DiNapoli and Messina knowingly aided and abetted fraudulent activities.
In addition to DiNapoli and Messina, the court issued default judgments against Madison Deane & Associates, Inc., Madison Deane Asia Corporation, ISB Clearing Corporation, Free Star Capital, Inc., William Holbrook & Associates, LLC, Oxford Capital Group, LLC, and George Omeste. These entities and Omeste were found to have fraudulently solicited millions from the public for off-exchange forex trading and misappropriated customer funds. They were collectively ordered to disgorge ill-gotten gains and pay $12,059,480 in restitution. Madison Deane & Associates, Inc., Madison Deane Asia Corporation, Free Star Capital, Inc., William Holbrook & Associates, LLC, Oxford Capital Group, LLC, and George Omeste were each assessed a $240,000 civil monetary penalty. ISB Clearing Corporation received a $120,000 penalty.
ISB Clearing Corporation was also found to have filed false financial reports with the National Futures Association regarding customer funds. The corporation was held jointly and severally liable for the $12,059,480 restitution ordered in the Madison Deane matter, in addition to its $120,000 penalty.
The court imposed permanent trading and registration bans against all defendants involved in the scheme. The CFTC continues to pursue cases involving fraudulent forex operations to protect investors and ensure the integrity of the market.
Source: CFTC.gov
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