In an eight-year-old enforcement action brought by the U.S. Commodity Futures Trading Commission (CFTC), a U.S. federal court has sanctioned a software consultant in connection with a forex fraud scheme, imposing a permanent ban, a monetary penalty and restitution.
The U.S. District Court for the Eastern District of New York issued a final judgment against Daniel Winston LaMarco and his company, GDLogix Inc., stemming from a CFTC enforcement action first brought in 2017. The regulator alleged they solicited US$1.5 million from investors to trade forex in an unregistered commodity pool.
Most of the investors’ money was lost in failed trading, and some was used to pay purported returns to earlier investors in what amounted to a Ponzi scheme.
The CFTC previously obtained a summary judgment against them, establishing liability for allegations of forex fraud and commodity pool fraud.
“The summary judgment report and recommendation found LaMarco committed fraud as a commodity pool operator and made material misrepresentations and omissions to existing and prospective pool participants. The order further found LaMarco misappropriated pool participants’ funds for personal use and conducted no trading on behalf of participants,” the CFTC said.
The court also granted the regulator’s motion on sanctions, ordering US$3.45 million in penalties and restitution and permanently banning LaMarco from engaging in any commodity-related activity.
A default judgment against GDLogix also imposed permanent trading and registration bans on the firm and ordered it to pay US$862,600 in restitution and a US$2.6 million penalty.
In 2017, LaMarco pleaded guilty to one count of commodities fraud and one count of wire fraud in a related criminal case. He was sentenced to 42 months in prison and ordered to pay US$872,600 in restitution.