Juvenal Eduardo Machado of Miami, Florida, is facing charges of defrauding approximately $786,000 from at least 28 customers through a Ponzi scheme involving retail foreign currency (forex) trading. The U.S. Commodity Futures Trading Commission (CFTC) filed the enforcement action on June 23, 2011, in the U.S. District Court for the Southern District of Florida.
According to the CFTC complaint, from December 2008 to at least October 2010, Machado and his company, Invers Forex, LLC, solicited funds from customers—including friends, neighbors, and members of his church—promising monthly “interest” payments of five percent or more. Machado allegedly claimed to be a highly successful forex trader, guaranteeing “financial freedom and security” and falsely stating he never lost money trading.
However, instead of trading customer funds as promised, Machado allegedly pooled less than $135,000 into a single trading account under his own name, losing almost 90 percent of it. He then allegedly used customer funds—not returned to investors or lost in trading—to cover personal and business expenses. Machado allegedly sent customers checks and cash representing false profits and provided misleading tax statements.
Beginning in March 2010, customers began requesting the return of their funds. Machado responded with delays and excuses before allegedly fleeing to Canada. Despite repeated demands, he has not returned the remaining customer funds.
The CFTC is seeking restitution for defrauded customers, the return of ill-gotten gains, civil monetary penalties, trading and registration bans, and permanent injunctions against further violations of federal commodities laws. The agency received assistance from the United Kingdom’s Financial Services Authority in the investigation.
The case is being handled by CFTC staff members Matthew Elkan, Michael Loconte, Dan Jordan, Rick Glaser, and Richard Wagner.
Source: CFTC.gov
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