Several months after the victims of Forex scheme ROFX took the firm to Court, the US regulators also took action against the fraudulent enterprise.
On January 27, 2022, the United States Commodity Futures Trading Commission (CFTC) filed a complaint at the Florida Southern District Court targeting ROFX and a number of entities and individuals associated with it.
The complaint, seen by FX News Group, alleges that from at least January 2018 through September 202, Jase Davis, Borys Konovalenko, Anna Shymko, Alla Skala, and Timothy Stubbs, individually and as the controlling persons of the interrelated companies Notus LLC d/b/a ROFX, Easy Com LLC d/b/a ROFX, Global E-Advantages LLC a/k/a Kickmagic LLC d/b/a ROFX, Grovee LLC d/b/a ROFX, and Shopostar LLC d/b/a ROFX, acting through, and/or in conjunction with, the web-based entity ROFX.net, acting as a common enterprise, misappropriated at least $58 million as part of a fraudulent scheme in, and/or in connection with, the offering of leveraged, margined or financed agreements, contracts, or transactions in retail Forex to U.S. and international customers who were not eligible contracts participants (ECPs).
Facilitating Defendants, individually and as the controlling persons of Corporate Defendants—operating through a maze of interrelated companies, shared managers and members—accepted funds from ROFX customers that were intended to be used to margin, leverage or finance agreements, contracts, or transactions in forex as described on the ROFX website. Corporate Defendants and Facilitating Defendants acted as a single, integrated common enterprise and misappropriated all of the $58 million they accepted from ROFX customers by immediately wiring said funds to offshore entities with no connection to forex trading.
The Fraudulent Enterprise utilized the ROFX website as a vehicle to solicit and obtain customers. On the website, ROFX claimed to create and trade retail forex accounts on behalf of customers utilizing a highly successful automated trading robot purportedly created in 2009. ROFX advertised itself as a legitimate forex brokerage with offices in Miami, London, and Hong Kong and guaranteed coverage of any trading losses sustained by customers.
Customers typically submitted an online application form on the website to open a retail forex trading account with ROFX. Thereafter, ROFX emailed customers an “invoice” directing customers to deposit or wire their funds to one or more of the Corporate Defendants, at continually changing U.S.-based bank accounts carried in the name of one of the Corporate Defendants, opened and/or controlled by one or more of the Facilitating Defendants.
Throughout the Relevant Period, Facilitating Defendants accepted ROFX customers’ funds into domestic Corporate Defendants’ bank accounts but did not send ROFX customers’ funds to a CFTC-registered futures commission merchant (“FCM”) or retail foreign currency dealer (“RFED”) to trade on behalf of customers. Rather, Facilitating Defendants immediately wired ROFX customer funds offshore to non-trading corporate entities in Poland, Thailand, and elsewhere, as well as to Facilitating Defendants themselves.
Facilitating Defendants were all corporate managers and officers of Corporate Defendants and did business as ROFX utilizing the ROFX website to solicit customers on their behalf as part of the Fraudulent Enterprise. They repeatedly accepted ROFX customer funds into Corporate Defendants’ bank accounts they controlled demonstrating knowledge of and participation in the predicate solicitation while knowingly, or recklessly, failing to disclose material facts to ROFX customers, including but not limited to:
- Defendants misappropriated all ROFX customer funds they accepted into Corporate Defendants’ bank accounts;
- Defendants did not trade forex for customers after accepting ROFX customers’ funds;
- Defendants did not forward ROFX customers’ funds to any entity that traded funds on behalf of ROFX customers;
- ROFX customers had no forex trading accounts;
- there was no ROFX forex trading robot; and,
- there were no ROFX corporate offices as falsely advertised on the website. Upon information and belief, there is no legally formed business entity known as “ROFX” anywhere in the U.S.
Defendants were joined in a common purpose of defrauding and profiting from ROFX customers, had relationships with and among each other, depended upon the participation of each other to accomplish their common purpose, and were each employed by and/or associated with the Fraudulent Enterprise during the Relevant Period. Defendants accepted and misappropriated at least $58 million from over 1,100 ROFX customers during the Relevant Period.
By engaging in this conduct and the conduct further described herein, Defendants have engaged, are engaging and/or are about to engage in acts and practices in violation of the Commodity Exchange Act (the “Act”), 7 U.S.C. §§ 6b(a)(2)(A), (C) and 9(1), and Commission Regulations, 17 C.F.R. §§ 5.2(b)(1), (3) and 180.1(a) (2021).
Furthermore, Corporate Defendants, doing business as ROFX through the ROFX website, each acted as FCMs without being registered with the CFTC in violation of 7 U.S.C. § 6d(a)(1) because they were engaged in soliciting or accepting orders for retail forex transactions and accepted funds in or in connection therewith.
Accordingly, pursuant to 7 U.S.C. §§ 2(c)(2)(C) and 13a-1, the CFTC has brought an action to enjoin Defendants’ unlawful acts and practices, to compel their compliance with the Act and Regulations, and to enjoin them from engaging in any commodity-interest related activity, as set forth below. The CFTC also seeks civil monetary penalties for each violation of the Act and Regulations, and remedial ancillary relief, including, but not limited to, disgorgement, pre- and post-judgment interest, and such other relief as the Court may deem necessary and appropriate.