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Multiple Individuals and Entities Fined Over $225 Million for Forex Fraud

2024-05-15 Brokersview

Darrin P. Gayles of the U.S. District Court for the Southern District of Florida issued an order of default judgment against four individuals and five companies (nine defendants): Jase Davis of Brandon, Mississippi; Borys Konovalenko of Ukraine; Anna Shymko of Duluth, Georgia; Alla Skala of Grand Island, New York and/or Fort Erie, Canada; Easy Com LLC d/b/a ROFX, a New Hampshire LLC; Global E-Advantages LLC a/k/a Kickmagic LLC d/b/a ROFX, a Delaware LLC and New York foreign LLC; Grovee LLC d/b/a ROFX, a Delaware LLC; Notus LLC d/b/a ROFX, a dissolved Colorado LLC; and Shopostar LLC d/b/a ROFX, a Colorado LLC, according to the announcement released by the Commodity Futures Trading Commission (CFTC) on Tuesday. 

 

The default judgment order stems from the CFTC’s August 31, 2022, amended complaint charging the nine defendants and defendant Timothy F. Stubbs with fraud, misappropriation, and registration violations in connection with a fraudulent foreign currency (forex) scheme. 

 

From January 2018 through September 2021, the five companies, acting as a common enterprise under the control of the five individual defendants, used the ROFX.net website to fraudulently solicit and misappropriate at least $57.5 million from U.S. and international customers for purported trading in forex. The defendants obtained customers through the ROFX website, wherein ROFX falsely claimed to trade forex utilizing a highly successful automated trading robot with guaranteed coverage of losses. 

 

The defendants misappropriated all of the customer funds they accepted into the defendant companies’ bank accounts by wiring the funds to offshore entities with no connection to forex trading and to the individual defendants’ personal accounts. 

 

In addition to their misrepresentations and misappropriation, the five companies acted as futures commission merchants by doing business as ROFX, soliciting or accepting orders for retail forex transactions via the ROFX website, and accepting funds in or in connection with such transactions without being registered with the CFTC.

 

Under the terms of the default judgment order issued April 22, the nine defendants are required to pay jointly and severally over $56 million in restitution to defrauded customers and a $169,086,837 civil monetary penalty. The default judgment order also permanently enjoins them from engaging in conduct that violates the CEA, as charged, and permanently bans them from registering with the CFTC and from trading in any CFTC-regulated markets.  

 

On May 8, the court also issued a supplemental consent order against the remaining defendant, Timothy F. Stubbs, a certified public accountant and resident of Atlanta, Georgia. The supplemental consent order requires Stubbs to pay a $314,000 civil monetary penalty and $153,000 in restitution. Previously, on December 19, 2023, the court entered an initial consent order of permanent injunction against Stubbs. The initial consent order finds Stubbs engaged in fraud and participated in the common enterprise through his control and operation of Grovee LLC, including accepting and misappropriating customer funds intended for forex trading. 

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