Chicago, IL – September 6, 2017 – The U.S. Commodity Futures Trading Commission (CFTC) today announced a civil injunctive enforcement action against Louis Carabini, Michael Carabini, and three affiliated companies – Monex Deposit Company, Monex Credit Company, and Newport Services Corporation (collectively, Monex). The case, filed in the U.S. District Court for the Northern District of Illinois, alleges a massive fraud scheme targeting thousands of retail investors nationwide.
The CFTC complaint accuses Monex and its principals of defrauding customers out of hundreds of millions of dollars through illegal, off-exchange leveraged commodity transactions. The scheme revolved around Monex’s “Atlas” program, which offered leveraged trading in gold, silver, platinum, and palladium. Authorities allege that Monex falsely presented the program as a safe and profitable investment opportunity, despite the fact that nearly all participants lost money.
According to the CFTC, over 12,000 trading accounts were used to place leveraged precious metals trades between July 16, 2011, and March 31, 2017, resulting in over $290 million in customer losses. The complaint details that Monex employed high-pressure sales tactics, downplayed the risks of the Atlas program, and falsely claimed to act as a fiduciary for its customers.
“Today, we announce the filing of one of the largest precious metals fraud cases in the history of the Commission,” stated James McDonald, the CFTC’s Director of Enforcement. “As alleged, the Defendants defrauded thousands of retail customers—many of whom are elderly—out of hundreds of millions of dollars as part of a multi-year scheme.”
The CFTC also alleges that Monex failed to register as a Futures Commission Merchant (FCM), a violation of the Commodity Exchange Act. Furthermore, the leveraged commodity transactions were not executed on a regulated exchange, in violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Louis and Michael Carabini are directly charged with offering the unlawful leveraged commodity transactions, as well as the fraud and registration violations, as controlling persons of Monex. The CFTC seeks injunctive relief, disgorgement of ill-gotten gains, and civil penalties against the defendants.
Source: CFTC.gov
Related Federal Cases
- Maurice L. Burks, Healthcare Fraud, Illinois 2023 · Illinois
- Orlando James Currey, Conspiracy to Commit Mail and Wire Fraud, Illinois 2015 · Illinois
- Bujar Sejdic, Financial Institution Fraud, Illinois 2023 · Illinois
- Nazaret Chakrian, ID Theft and Wire Fraud, California 2023 · Idaho
- Dominick Palladinetti, Drug Smuggling, Illinois 2023 · Illinois
MORE FEDERAL CRIME NEWS
US NewsUS NewsUS NewsUS News