VERO BEACH, FL – David L. Ortiz, 41, of Vero Beach, Florida, has been hit with a default judgment and permanent injunction following a CFTC enforcement action alleging a multi-year forex fraud. Judge K. Michael Moore of the U.S. District Court for the Southern District of Florida issued the order on July 12, 2011.
The CFTC initially filed charges against Ortiz, along with his companies Goyep International, Inc. and Royal Returns, Inc., on February 23, 2011. The complaint detailed a scheme to defraud customers through off-exchange foreign currency trading and the misappropriation of their funds.
According to the court order, Ortiz and his companies are jointly and severally liable for $292,676.62 in restitution to the victims. They must also pay a civil penalty of $878,000. Furthermore, Ortiz’s wife, Loredana Ortiz, and her company, Natural Health Matters, L.L.C., were named as relief defendants and ordered to disgorge $20,604 in ill-gotten gains.
The investigation revealed that from May 2008, Goyep and Royal Returns, under Ortiz’s direction, lured 11 customers with false promises of guaranteed 10% monthly profits through forex trading. However, the court found that nearly all trading activity resulted in significant losses. The operation functioned, in part, as a Ponzi scheme, with funds from new investors used to pay earlier investors.
Customers were unable to withdraw their investments because the funds were either lost through trading, distributed to other customers as part of the Ponzi scheme, or directly misappropriated by Ortiz, Goyep, and Royal Returns. The defendants allegedly used $313,280 of the $491,446 received from customers for personal expenses.
The court permanently banned Ortiz, Goyep, and Royal Returns from engaging in any commodity-related activities, including trading and registration with the CFTC. They were also ordered to remove all related solicitations from the internet.
The case was led by CFTC staff members Susan B. Padove, Joy McCormack, Elizabeth Streit, Scott Williamson, Rosemary Hollinger, and Richard B. Wagner.
Source: CFTC.gov
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