WASHINGTON, D.C. – Morgan Hunt and Kim Hecroft are facing federal charges following a Commodity Futures Trading Commission (CFTC) investigation into a fraudulent solicitation scheme, announced September 28, 2018. The CFTC filed a complaint in the U.S. District Court for the Northern District of Texas alleging that Hunt, purportedly of Arlington, Texas, and Hecroft, purportedly of Baltimore, Maryland, defrauded at least two customers through false and misleading representations.
The defendants, operating as Diamonds Trading Investment House and First Options Trading respectively, are accused of soliciting Bitcoin from the public with promises of profitable investments in leveraged foreign currency contracts (forex), binary options, and diamonds. According to the CFTC, Hunt and Hecroft misrepresented their trading experience, provided fabricated account statements, and falsely claimed customer funds were being invested for their benefit.
The scheme allegedly ran from January 2017 until the present, utilizing Facebook and email to target victims. A key component of the fraud involved a fabricated “tax” requirement. Defendants told customers they could not withdraw investment profits until they paid a tax to the CFTC, a claim the agency vehemently denies. They supported this claim with forged documents, including a doctored version of an official CFTC memorandum, complete with the agency’s seal.
Hecroft is specifically accused of using these forged documents to induce a customer into transferring additional Bitcoin, falsely representing it as payment for the required CFTC tax. The use of the CFTC’s official seal on these forged documents may constitute a federal crime under 18 U.S.C. § 506 and/or 18 U.S.C. § 1017.
“Increased public awareness of the CFTC’s involvement in policing the virtual currency markets has, unfortunately, provided new opportunities for bad actors,” said James McDonald, CFTC Director of Enforcement. “The CFTC is on guard against fraudsters who try to take advantage of the CFTC’s reputation in order to cheat customers, and will take swift action against such misconduct.”
The CFTC is seeking restitution, disgorgement of ill-gotten gains, civil penalties, and a permanent injunction against Hunt and Hecroft. The specific amounts of penalties have not been determined and will be pursued through the court proceedings.
Source: CFTC.gov
Related Federal Cases
- Jarrod Williams, Mortgage Fraud and Drug Conspiracy, Texas, 2013 · Texas
- Nancy Chan, Marriage Fraud Conspiracy, Texas 2024 · Texas
- Chad Wayne Hogan, HUD Utility Assistance Program Fraud, Texas 2023 · Texas
- Festus Akpobonme, $4M Fraud and Money Laundering, Texas 2024 · Texas
- Doriann Morgan, Health Care Fraud, Missouri 2024 · Alabama
