For Release: March 16, 2010
CFTC Charges Florida Man and Cyber Market Group LLC with Operating a Multi-Million Dollar Ponzi Scheme in Hawaii and Elsewhere in the U.S.Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced that it charged Patrick Rakotonanahary and Cyber Market Group LLC (Cyber Market), both of Punta Gorda, Florida, with operating a multi-million dollar foreign currency (forex) Ponzi scheme in Hawaii and elsewhere in the United States.
On March 15, 2010, the CFTC held a press conference in Honolulu, Hawaii with the United States Attorney’s Office for the District of Hawaii (USAO), the Federal Bureau of Investigation (FBI) and the State of Hawaii, Department of Commerce and Consumer Affairs, Office of the Securities Commissioner (the DCCA) and announced that this action resulted from a joint CFTC cooperative enforcement investigation with these agencies.
The CFTC’s lawsuit, filed on March 15, 2010, in the U.S. District Court for the District of Hawaii, charges that, since at least June 2008, Rakotonanahary, the president and Chief Executive Officer of Cyber Market, and Cyber Market induced customers to purportedly loan them money to trade forex on their behalf. The CFTC complaint alleges that the defendants promised customers weekly payments of four percent to 10 percent from the forex trading, knowing that they lacked the funds to make such payments. The complaint further alleges that the defendants falsely represented to customers that the payments were derived from profitable forex trading. In reality, however, these payments were made from customers’ own funds and/or the funds deposited by other clients.
According to the complaint, the defendants also misappropriated client funds for their own personal use. In addition, Rakotonanahary and Cyber Market allegedly misrepresented that they had not lost funds in seven years of trading forex and provided false statements to investors, showing a balance of more than $8 million in Cyber Market’s forex trading account when, in fact, the account contained less than one percent of that amount.
In its continuing litigation, the CFTC seeks restitution, disgorgement of ill-gotten gains, civil monetary penalties, trading and registration bans and permanent injunctions against further violations of the federal commodities laws.
Rakotonanahary Charged with Fraud by Criminal and State Authorities
The CFTC notes the arrest of Rakotonanahary on March 15, 2010, and commends the USAO’s filing of a criminal indictment against Rakotonanahary, charging him with fraud in connection with this scheme, and the filing by the DCCA of an administrative complaint against Rakotonanahary in connection with this scheme. The CFTC wishes to thank the USAO, the FBI and the DCCA for their assistance in this matter.
The following CFTC Division of Enforcement staff members are responsible for this case: Philip Rix, Elizabeth C. Brennan, Steven Ringer, Lenel Hickson, Vincent McGonagle and Stephen J. Obie.