Rowland Heights, CA – October 11, 2007 – Hao Jan Lu has been ordered to pay over $1.1 million in restitution and penalties for his role in a fraudulent foreign currency trading scheme, the Commodity Futures Trading Commission (CFTC) announced today. The settlement stems from a complaint filed in 2004 alleging Lu, along with Emerald Worldwide Holdings, Inc., Jian Zhuang, and City Trust and Investment Co. Inc., illegally solicited over $5 million from investors in Japan and China.
Judge A. Howard Matz of the U.S. District Court for the Central District of California issued a consent order requiring Lu to pay $1,092,925.38 in restitution to defrauded investors and a $65,000 civil monetary penalty. The order also permanently prohibits Lu from any involvement in commodity-related activities, including trading and soliciting investments in commodity futures and options.
The CFTC alleged that Emerald Worldwide Holdings used false promotional materials to mislead investors about its registration status and affiliation with legitimate CFTC-registered entities. Instead of trading customer funds as promised, Emerald and City Trust allegedly transferred the money to bank accounts in the United States, Japan, China, and Hong Kong, benefiting themselves and others.
The scheme involved soliciting retail customers to deposit funds into U.S. bank accounts to trade illegal, off-exchange foreign currency futures contracts. The CFTC found that Emerald, City Trust, Zhuang, and Lu violated the Commodity Exchange Act (CEA) by misappropriating these customer funds. A default judgment was previously entered against City Trust in April 2005.
Consent orders were also previously issued against Emerald and Zhuang in November 2006, collectively requiring them to pay $3,433,722.61 in restitution and $9,250,000 in civil penalties. Robb Evans & Associates LLC has been appointed as Fund Administrator to manage the claims process and distribute approximately $1.5 million currently available for restitution to eligible claimants. Claimants can contact Robb Evans & Associates LLC at 11450 Sheldon Street, Sun Valley, CA 91352-1121 or via email at [email protected].
Source: CFTC.gov
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