Chicago, IL – A federal judge has ruled against Sam Ikkurty of Oregon and his associated companies – Jafia, LLC, Ikkurty Capital, LLC d/b/a Rose City Income Fund I, Rose City Income Fund II, and Seneca Ventures, LLC – finding them liable for operating a massive Ponzi scheme and commodity fraud. Judge Mary Rowland of the U.S. District Court for the Northern District of Illinois granted summary judgment to the Commodity Futures Trading Commission (CFTC) on all counts of its complaint this week.
The court order mandates the defendants collectively pay over $83.7 million in restitution to defrauded investors and $36.9 million in disgorgement. The CFTC will also pursue injunctive relief and a civil monetary penalty.
According to the court, Ikkurty lured investors through webinars and trade shows with promises of a consistent 15% annual return on investments in digital asset commodities like Bitcoin and Ethereum. He falsely touted the success of a previous fund and claimed to invest in “stable” digital assets, while also sharing fabricated stories of his personal trading success. The CFTC investigation revealed Ikkurty did not generate any net profits for investors, instead utilizing a Ponzi scheme structure to pay earlier investors with funds from new participants.
Judge Rowland noted Ikkurty’s marketing materials misrepresented the fund’s performance, failing to disclose a 98.99% loss in value over a few months. Evidence presented by CFTC investigators showed Ikkurty’s personal Bitcoin holdings were lost to a hack, contradicting his claims of expertise. A significant portion of the fraud involved a carbon offset program. The defendants raised funds by selling products purportedly backed by digital assets related to carbon offsets, but instead of securing the promised collateral, they diverted funds to cover losses in other ventures.
This misappropriation of funds resulted in a $20 million shortfall for participants in the carbon offset program, which the court described as “a classic Ponzi move.” The defendants also failed to register with the CFTC as commodity pool operators, further violating federal regulations. The judge affirmed that Bitcoin, Ethereum, and even lesser-known virtual currencies like OHM and Klima, fall under the CFTC’s definition of commodities.
The CFTC cautions that the process of recovering funds for victims may take time.
Source: CFTC.gov
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