A civil enforcement action has been filed by the Commodity Futures Trading Commission (CFTC) in the U.S. District Court for the Southern District of Florida against Aviv Michael Hen, owner and president of Omega Knight 2, LLC, and Erez Hen. The CFTC alleges a scheme to defraud customers through illegal, off-exchange transactions in precious metals.
The complaint details that from March 2013 through at least June 2017, Omega Knight and the Hens allegedly defrauded at least 90 customers across the United States, receiving over $5.5 million. The defendants are accused of making false statements to induce customers into leveraged, financed, and fully-paid precious metals transactions.
According to the CFTC, customer funds were not fully used to purchase precious metals as promised. Instead, the funds were allegedly misappropriated for personal expenses, distributed as purported “profits” to other customers – functioning as a possible Ponzi scheme – and used to fund Omega Knight’s operations. False trade confirmations and account statements were allegedly used to conceal this misappropriation.
The transactions were reportedly leveraged or financed, occurring off-exchange, and never resulted in the full delivery of purchased metal to customers. Omega Knight allegedly acted as a Futures Commission Merchant (FCM) by accepting customer orders and funds, but failed to register with the CFTC as required.
The CFTC is seeking disgorgement of ill-gotten gains, civil monetary penalties, restitution, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) against Omega Knight, Aviv Hen, and Erez Hen. Customers are encouraged to report suspicious activity to the CFTC via the toll-free hotline 866-FON-CFTC or file a complaint online.
The investigation was led by CFTC Division of Enforcement staff members Patricia Gomersall, Jason Wright, Kassra Goudarzi, A. Daniel Ullman II, and Paul G. Hayeck.
Source: CFTC.gov
Related Federal Cases
- Orlando Pascual Jr., HIV Treatment Medicare Fraud, Miami FL, 2023 · Florida
- Juan A. Tony Marrero, Medicare Fraud Scheme, Miami FL, 2023 · Florida
- Juan A. Tony Marrero, Medicare Fraud Scheme, Miami FL, 2024 · Florida
- Alton Plunkett, Tax Fraud, New York NY, 2023 · Florida
- Letitia James Charged 5 RCI Execs with Tax Fraud and Bribery, New Y… · Arkansas
