Paulo Correa, along with UForex Consulting, LLC, and Mario Garcia, are facing charges of fraud following a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC) in the U.S. District Court for the Western District of Louisiana on January 18, 2007. The defendants allegedly defrauded at least 20 Louisiana residents in the New Iberia area and surrounding communities.
According to the CFTC, from January 2002 through at least November 2004, Correa, acting individually and as the controlling person of UForex, and Garcia fraudulently solicited over $3.7 million from at least 127 retail customers. They claimed to be trading over-the-counter forex contracts, purportedly cleared through another company controlled by Correa. The sales pitches promised monthly returns of 5% to 10% with limited risk.
For months, UForex provided customers with monthly account statements falsely reporting profitable returns. However, in October 2004, customers received statements and a letter from Correa revealing that approximately 70% – or $2.9 million – of their investments had been lost. The CFTC alleges that Correa also misappropriated at least $2 million of customer funds for personal use.
On January 9, 2007, U.S. District Judge Rebecca F. Doherty issued a restraining order prohibiting the defendants from destroying documents and denying access to books and records. The order also froze the assets of all defendants. UForex, which was never registered with the CFTC, claimed corporate headquarters in Charleston, South Carolina; Nevis; and Nassau, Bahamas. Correa presented himself as the company’s sole trader.
The CFTC is seeking preliminary and permanent injunctions against the defendants, restitution for defrauded investors, and monetary penalties. Gregory Mocek, the CFTC’s Director of Enforcement, emphasized the agency’s commitment to pursuing forex fraud cases nationwide. The Iberia Parish Assistant District Attorney Ralph K. Lee, Jr. and the Lafayette division of the U.S. Attorney’s Office for the Western District of Louisiana assisted in the investigation.
Source: CFTC.gov
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