The US Commodity Futures Trading Commission (CFTC) today charged a Danish man in a case involving the operation of a fraudulent FX scheme.
The regulator said Casper Mikkelsen, aka Carsten Nielsen, Brian Thomson, Thomas Jensen and Casper Muller had set up and ran a retail foreign currency exchange trading firm, called GNTFX, from at least 2015 up until now.
The defendant cold-called potential clients and convinced them to invest in the company. The victims were told their cash would be used to trade in Forex markets. The fraudsters even went as far as to draft performance reports which falsely claimed their pools had achieved stunning annual returns for investors.
The complaint also details Mikkelsen’s alleged means of concealing trading losses, including issuing false monthly account statements and checks that purported to represent trading profits and investment returns.
Further explaining the scheme, the CFTC alleges that most clients deposited their funds into US bank accounts, while others deposited into an overseas account or with an American ecommerce company. Mikkelsen withdrew all client funds through his debit card, as well as transferred from the US bank accounts to his bank overseas, and from there to a Bitcoin address.
For new participants, they were assured to receive guaranteed annual returns, while they were actually duped into a Ponzi scheme. To support the fraud, GNTFX workers sent bogus account statements to clients, falsely showing positive returns on their investments, while he actually and misappropriated $737,000 and lost a similar amount. In total, nearly 101 retail investors were defrauded out f $1.5 million.
A Ponzi-style scheme
For example, these fake statements showed that from December 2015 to October 2016, Mikkelsen showed one of his victims that his account grew from $4,000 to over $26,000 in less than a year, or 555% return on investment. In fact, Mikkelsen never traded in this account or any other GNTFX clients’ account. In addition, he set up a website called fxturtletrader.com in which he listed these purported historical returns earned by Mikkelsen.
Mikkelsen then made these fake account statements available to his clients on the GNTFX website. For example, from November 2016 to July 2017, one client saw his forex investments grow on these fake statements to a balance of $24,000 from $11,700. In another case, a client account statement falsely showed 486% profits in a 16-month period for fictitious forex trading.
The pyramid operators lived the good life with the money, paying for personal expenses that included exotic vacations, sports tickets, loans to family members and colleges, said authorities.
Nearly all of the pool money was lost, according to the complaint that accuses the defendant of fraud, misappropriation, registration violations and issuing false statements.
Additionally, in order to shore up the fraud, they used a Ponzi-style scheme in which they paid some money to early investors that they claimed represented profits but were, in fact, other investors’ funds.