Barrington, IL – Dro Kholamian, 53, of Barrington, Illinois, is facing charges of fraud following a civil enforcement action filed by the Commodity Futures Trading Commission (CFTC) on December 17, 2018. The CFTC alleges Kholamian and his company, Blue Star Trading, LLC, fraudulently solicited over $1.9 million from more than 30 clients, including members of the local Armenian community, to trade leveraged off-exchange foreign currency and commodity futures contracts.
According to the complaint, beginning in January 2013, Kholamian promised clients a 10-20 percent profit on a $25,000 investment within one year, with the ability to withdraw funds at any time. However, the CFTC alleges Kholamian did not trade the funds as represented, instead misappropriating them for personal and business expenses, and using a Ponzi-like scheme to pay earlier investors.
The CFTC complaint details how Kholamian falsely assured clients their investments were performing well, while allegedly using the funds to cover medical bills, make cash withdrawals, and pay other clients. When clients requested withdrawals, Kholamian reportedly ignored their demands, fabricated reasons for delays, and even issued checks from an account with insufficient funds.
On November 30, 2018, Judge Sara Ellis of the U.S. District Court for the Northern District of Illinois issued a Statutory Restraining Order freezing the assets of Kholamian and Blue Star, and prohibiting the destruction of records. A Consent Order for Preliminary Injunction was entered on December 13, 2018, continuing these restrictions and preventing further violations of the Commodity Exchange Act and its regulations.
The CFTC is seeking full restitution for defrauded clients, disgorgement of ill-gotten gains, a civil monetary penalty, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC Regulations.
Source: CFTC.gov
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