A federal court in Alabama has ordered Husam Tayeh of Illinois, along with his companies Dinar Corp., Inc. and My Monex, Inc., both Nevada-based, to pay over $22.6 million in penalties for a fraudulent foreign currency scheme. The judgment, entered by the U.S. District Court for the Middle District of Alabama following a bench trial, stems from a complaint originally filed by the Commodity Futures Trading Commission (CFTC) in July 2015.
The court found Tayeh and his companies liable for violations of the Commodity Exchange Act, specifically for fraudulently soliciting customers into financed retail forex transactions involving Iraqi Dinar and Vietnamese Dong. The scheme involved misappropriating customer funds and failing to comply with registration requirements. The total penalty includes $22,559,153 in disgorgement and a $140,000 civil monetary penalty.
“This ruling reaffirms the CFTC’s commitment to working in parallel with our enforcement counterparts,” stated CFTC Director of Enforcement James McDonald. The CFTC collaborated with the Alabama Securities Commission, the U.S. Attorney’s Office for the Middle District of Alabama, and the Federal Bureau of Investigation throughout the investigation.
Amanda Senn, Chief Deputy Director of the Alabama Securities Commission, lauded the CFTC’s work and pledged continued cooperation in combating fraudulent trading practices. The court previously found the defendants liable on four counts in February 2018, but the determination of penalties was reserved for trial, which concluded in August 2019.
Additionally, the court released a pallet of seized Iraqi Dinar and Vietnamese Dong, valued at over $2.5 million at the time of seizure, to the CFTC as an offset against the final judgment. A related criminal action was filed by the U.S. Attorney’s Office for the Middle District of Alabama in June 2016, charging Tayeh with one count of wire fraud.
Theodore S. Hudson, II and his company, My Monex, Inc., an Alabama corporation, were previously identified as relief defendants and resolved their involvement through a consent order in 2018, returning funds obtained through the fraudulent scheme.
Source: CFTC.gov
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