The Securities and Exchange Commission (SEC) and Commodities Future Trading Commission (CFTC) have both charged a Maryland-based Ponzi scheme for allegedly defrauding over 1,000 investors to the tune of over $27 million. The defendants allegedly told participants their funds would be used by licensed traders for foreign exchange and cryptocurrency trading.
Over the course of the past three years, the defendants convinced investors to contribute to the so-called "1st Million Pool," which they said would be held in trust or escrow and then used to trade in foreign exchange markets and bitcoin. The SEC claims they promised "risk-free" returns between 6% and 42%. The CFTC says the defendants promised pool participants returns of up to 30% per month from the company’s trading. The CFTC further alleges that the defendants used at least $7 million from these funds for personal luxuries and at least $18 million to continue the scheme itself.
Further, the SEC alleges that the defendants "often targeted vulnerable African immigrants and exploited their common ancestry and religious affiliations." One defendant, Dennis Jali, allegedly posed as a pastor and self-made millionaire to lure investors, holding meetings in a rented office space, according to the SEC’s statement.
Maryland’s U.S. Attorney is also filing criminal charges related to the allegations. Jali fled the U.S. last year, but was arrested in South Africa on federal charges of conspiracy, wire fraud, securities fraud and money laundering. The Department of Justice is attempting to bring Jali to the U.S. to face the charges, according to the Maryland’s U.S. Attorney Office.
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