CHICAGO, IL – May 19, 2022 – Sam Ikkurty, also known as Sreenivas I Rao, of Portland, Oregon, along with Ravishankar Avadhanam of Aurora, Illinois, are facing charges of fraud following a civil enforcement action filed by the Commodity Futures Trading Commission (CFTC) in the U.S. District Court for the Northern District of Illinois. The complaint alleges the pair fraudulently solicited at least $44 million from investors for participation interests in a digital asset income fund.
The CFTC alleges that Ikkurty and Avadhanam operated an illegal commodity pool and failed to register as a Commodity Pool Operator. Jafia LLC, a company owned by Ikkurty in Florida, is also named as a defendant in the case. The complaint further names three funds – Ikkurty Capital LLC d/b/a Rose City Income Fund, Rose City Income Fund II LP, and Seneca Ventures LLC – as relief defendants, claiming they possess funds obtained through the alleged fraudulent scheme.
On May 11, 2022, Judge Mary Rowland issued a statutory restraining order freezing assets controlled by the defendants, preserving records, and appointing a Temporary Receiver. The defendants were served with process on May 16, 2022, and a status hearing is scheduled for May 25, 2022.
According to the CFTC, since at least January 2021, Ikkurty and Avadhanam used a website, YouTube videos, and other methods to solicit over $44 million from at least 170 participants. The funds were intended for investment in digital assets, commodities, derivatives, swaps, and commodity futures contracts. However, the complaint alleges the defendants misappropriated the funds, distributing them to other participants in a manner resembling a Ponzi scheme. Millions of dollars were also allegedly transferred to an offshore entity and potentially a foreign cryptocurrency exchange, with none of the funds being returned to the pool.
The CFTC is seeking restitution for defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations.
The case is being handled by Candice Haan, Heather J. Dasso, Joseph Patrick, Venice Bickham, Stacie Pan, David Terrell, Scott Williamson, and Robert Howell of the CFTC’s Division of Enforcement.
Source: CFTC.gov
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