New York, NY – Thomas Qualls was ordered to pay over $4.6 million in restitution and penalties for operating an illegal off-exchange foreign currency (forex) futures fraud, the U.S. Commodity Futures Trading Commission (CFTC) announced today, May 3, 2012. The order, issued by Judge Dora L. Irizarry of the U.S. District Court for the Eastern District of New York, stems from a 2003 CFTC enforcement action.
The court found Qualls and his company, International Foreign Currency, Inc. (IFC), guilty of misappropriation, fraudulent solicitation, and unlawfully offering off-exchange forex futures contracts between November 2001 and July 2003. Qualls and IFC were required to pay $814,733 in restitution and a $3.84 million civil monetary penalty.
The CFTC initially filed a complaint on July 23, 2003, charging Qualls, IFC, and Michael Kourmolis with fraudulently soliciting customers and misappropriating funds. Kourmolis was later subject to a permanent injunction in 2009. In a related criminal case, Qualls was convicted on 16 counts including mail and wire fraud, conspiracy, and obstruction of justice on November 5, 2008. A jury also determined that Qualls received $922,382 in proceeds from the scheme.
The court specifically barred Qualls and IFC from re-litigating the facts of his criminal convictions related to the CFTC’s fraud allegations. Evidence showed Qualls falsely told customers their funds would be held in insured accounts up to $25 million, issued false account statements showing fabricated profits, and then misappropriated customer funds for personal use.
Qualls fled to Canada prior to closing arguments in the criminal trial and remained a fugitive until his arrest by Canadian authorities on March 17, 2009. He remains detained in Montreal, Quebec, awaiting extradition to the United States, and has yet to be sentenced for the criminal charges.
The CFTC acknowledged the assistance of the U.S. Attorney’s Office for the Eastern District of New York and the Québec Autorité des marchés financiers (AMF) in the case.
Source: CFTC.gov
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