CFTC Alleges Florida Forex Venture Offering 12% Guaranteed Returns Was $75 Million Ponzi Scheme

The Commodity Futures Trading Commission recently unsealed an action in Florida federal court accusing five men of operating a Ponzi scheme that raised at least $75 million from at least 650 investors nationwide.  The action, filed in the Middle District of Florida, charges Michael DaCorta, Joseph S. Anile, II, Raymond P. Montie III, Francisco “Frank” Duran, John Haas, and various entities with violations of the Commodity Exchange Act and seeks various relief including a permanent injunction, disgorgement of ill-gotten gains, restitution, and imposition of civil monetary penalties.  A temporary receiver was also appointed at the Commission’s request to marshal assets for the benefit of defrauded victims.

The Complaint alleges that the Defendants operated several entities, Oasis International Group Ltd., Oasis Management LLC, and Satellite Holdings Company, collectively as “Oasis” and  began soliciting victims in mid-2014 to invest in two commodity pools - Oasis Global FX, Limited (“Oasis Pool 1”) and Oasis Global FX, SA (“Oasis Pool 2” (collectively, the “Oasis Pools”) with promises of minimum 12% annual returns derived from trading forex.  Potential “lenders,” as investors were called in an apparent effort to avoid implicating federal securities laws, were told that the Oasis Pools had never had a losing month (indeed, one Defendant allegedly claimed the operation had never had a down day), that there was no risk of loss, and that the only way forex trading could be a bad investment was “if all the banks in the world closed.”  Oasis also allegedly offered a referral program designed to incentivize the recruitment of new investors.

Potential investors were told that DaCorta was the “brains of the operation” who was able to obtain consistent returns by trading forex, with the Oasis Pools purportedly returning 22% in 2017 and 21% in 2018.  Investors were also told that the guaranteed annual return of 12% was a minimum return, as investors would also be entitled to share the daily profits their funds purportedly generated from trading.  Oasis also allegedly made numerous representations concerning the safety of investor funds, including Defendant Duran’s purported statements that Oasis owned at least $15 million in real estate and precious metals that served as collateral for its investments and that “the Oasis Pools’ trading platform could not lose money unless there was a bigger problem in the financial markets and people were going to supermarkets with shotguns.”  Investors were received regular account statements showing the purported growth of their account.  Oasis ultimately raised roughly $75 million from at least 650 investors nationwide (despite claiming on its website that it was not open to U.S. investors). 

According to the Commission, however, all of these claims were false and designed to conceal Oasis’s operation of a classic Ponzi scheme by paying fictitious returns using investor funds.  For starters, the Commission alleges that potential investors were not told that DaCorta was effectively permanently banned from the forex trading industry in 2010 after several rules violations during his time as President of a forex trading firm.  While Oasis did engage in some legitimate trading, the Commission alleges that it suffered near total losses of investor funds (and not the consistent above-20% returns in 2017-2018).  For example, Oasis’s actual returns in 2017 and 2018 were -45% and -96%, respectively.  And contrary to Defendants’ representations regarding the safety of investor funds, the Commission alleges that the forex trades in the Oasis accounts had a 100:1 leverage ratio.  

Of the approximately $47 million that was not invested as promised, the Commission claims that Defendants misappropriated those funds to, among other things, make $28 million in Ponzi payments, purchase nearly $8 million of real estate, live a luxurious lifestyle, and make transfers to related third parties.  

A copy of the complaint is below:

Hawaii Woman "Bestowed by Jesus to Trade Commodities" Sentenced to Prison for $1 Million Ponzi Scheme

A Hawaii woman who told investors that she had been "bestowed by Jesus Christ to with the ability to trade commodities", but instead operated a Ponzi scheme, was sentenced to federal prison on Friday.  Kapua Keolanui, 36, was sentenced to thirty-three months in federal prison by United States District Judge David Ezra, who called her behavior callous and also ordered her to pay nearly $900,000 in restitution to her victims.  Keolanui, who had previously pled guilty to one count of wire fraud, was sentenced to the maximum sentence under federal sentencing guidelines.  Wire fraud carries a maximum sentence of up to twenty years in federal prison.  

The scheme derives out of Keolanui's association with Rachelle and Perry Griggs, who were recently sentenced to prison for masterminding the scheme.  Previous Ponzitracker coverage of the Griggs is here.  Perry Griggs became associated with Keolanui's husband when both were incarcerated; ironically, Perry Griggs was serving time for his role in a previous Ponzi scheme.  Through his relationship with Keolanui's husband, Perry Griggs convinced Keolanui to form Paradise Trading, LLC with Rachelle Griggs in late 2006.  Keolanui then solicited friends and family, telling them that she had been given the gift of finding money by Jesus Christ.  In total, six different individuals gave Keolanui over $1 million to invest.  Instead of using the money to invest, Keolanui funnelled some of the money to Aloha Trading, which was Perry Grigg's operation that he was running from behind prison walls.  When Grigg's scheme was uncovered, nearly all of the victims' money had disappeared.  

Keolanui was scheduled to report to prison on November 28, 2011.  She was also ordered to three years of probation upon release from prison.  

A copy of the Complaint filed against Griggs and Aloha Trading by the U.S. Commodity Futures Trading Commission is here.

Hip-Hop Promoter Accused of $4 Million Ponzi Scheme

Federal authorities arrested a former hip-hop mogul and accused him of operating a $4 million Ponzi scheme that purported to invest in derivatives of United States Treasury bonds.  Tyrone Gilliams Jr., 44, was arrested last week on federal wire fraud charges, which carry a maximum prison sentence of twenty years and up to a $250,000 fine.  If convicted, he may also be ordered to pay restitution to victims.

Gilliams, a former hip-hop promoter, is now an internet preacher, and maintains a page at StreamingFaith, a provider of internet broadcast services to faith-based corporations.  According to a bio on the site, Gilliams formerly worked with "music mogul Sean Puffy Combs creating Bad Boy Sports.  Tyrone was eventually called to collaborate with the ultimate mogul our Lord and Savior Jesus Christ."

According to a recently unsealed criminal complaint, Gilliams operated TL Gilliams, LLC, and held himself out as a successful investor in United States Treasury Strips. Treasury Strips are derivatives of Treasury bonds, and operate by separating each periodic interest payment and corresponding future return of principal into individual securities.  During the spring of 2010, an individual investor made a $4 million investment with Gilliams' company with the stated purpose of obtaining income to operate a charitable foundation.  Two contracts signed between the victim and an intermediary stated that the funds would be invested in "treasury strips, treasury bills [and] U.S government paper."  

Instead, Gilliams is alleged to have misappropriated at least $2 million of the original $4 million investment, using over $1 million to fund a black-tie gala called the 'Joy to the World' festival at the Philadelphia Ritz-Carlton.  Additionally, approximately $1.6 million was sent to Ghana in what Gilliams described as an investment in gold.  Funds were also used to sustain a lavish lifestyle that included international travel.  Gilliam represented himself in an earlier civil suit filed by the victim, and in a motion to dismiss, alleged that the original contract called for an investment in gold and commodities in West Africa, specifically Ghana.  

Gilliams was arrested on October 5th, and was scheduled to be arraigned later that day.  

A copy of the Justice Department's press release is here.

A copy of the unsealed criminal complaint is here.