West Bloomfield, Michigan resident Dwight A. Foster and his firm, K.E.L. Enterprises, Inc., have been ordered to pay $4,548,390.51 in restitution, $803,126.83 in disgorgement, and a $1.6 million civil monetary penalty for running a fraudulent foreign currency (forex) scheme, according to a supplemental consent order entered by Judge Sean F. Cox of the U.S. District Court for the Eastern District of Michigan.
The order builds upon an initial consent order issued on July 18, 2023, which permanently banned Foster and K.E.L. Enterprises from trading in CFTC-regulated markets and registering with the agency. The initial order also found that K.E.L. operated as an unregistered commodity pool operator (CPO) and Foster acted as an unregistered associated person (AP) from January 1, 2017, to July 3, 2023, failing to maintain proper disclosures and books and records.
The CFTC’s complaint, filed June 28, 2023, alleged that Foster and K.E.L. fraudulently solicited $13,214,327.88 from 50 individuals to participate in a commodity pool for forex trading. However, instead of trading the funds as promised, they were allegedly misappropriated into K.E.L.’s corporate bank accounts controlled by Foster. These funds were then reportedly used for personal expenses, including a car loan, insurance, credit card payments, and daily living costs.
The CFTC also alleges that Foster operated a Ponzi scheme, using $8,665,937.37 of funds from later investors to pay purported “profits” and “redemptions” to earlier investors. The agency cautioned that victims may not recover all lost funds, as the defendants may lack sufficient assets.
The investigation was conducted with assistance from the U.S. Attorney’s Office for the Eastern District of Michigan and the Federal Bureau of Investigation. The CFTC’s enforcement team included Timothy J. Mulreany, George H. Malas, Kassra Goudarzi, and Paul G. Hayeck.
Source: CFTC.gov
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