The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against Emerson Pires, Flavio Goncalves, Joshua Nicholas, and Empires Consulting Corp. in the U.S. District Court for the Southern District of Florida. The defendants are accused of fraudulently soliciting over $41.6 million, including $14.3 million from U.S. residents, through a commodity interest pool known as EmpiresX.
The CFTC alleges that Pires, Goncalves, and Empires Consulting Corp. misappropriated at least $5 million of the funds contributed by EmpiresX pool participants. The scheme, which began around September 2020, enticed investors with promises of “financial independence” and daily profits through investments in futures, options, stocks, and cryptocurrency.
According to the complaint, the defendants falsely claimed to be generating returns and misrepresented the size of the investment pools. They also allegedly presented fabricated screenshots of a profitable EmpiresX trading account on a major electronic trading platform – an account that, in reality, did not exist. Instead, the defendants created a deceptive website to give the illusion that EmpiresX was actively trading participant funds.
Only approximately $1 million of the collected funds was actually deposited into a futures trading account under the name of Empires Consulting. The vast majority of the money was either lost or misappropriated. By November 2021, the defendants ceased fulfilling withdrawal requests from pool participants, and there is reportedly no evidence of substantial returns being distributed.
The CFTC further alleges that the defendants misrepresented EmpiresX’s registration status and operated as unregistered commodity pool operators and associated persons. The agency is seeking full restitution for defrauded participants, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against future violations of the Commodity Exchange Act (CEA).
Parallel criminal and civil actions related to this conduct have also been filed by the Department of Justice and the Securities and Exchange Commission (SEC) in the Southern District of Florida. The CFTC acknowledged the assistance of the SEC and the National Futures Association in this investigation.
Source: CFTC.gov
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