Owners of FX Hedge Fund Admit to Being a Ponzi Scheme

A New Jersey couple who purportedly owned a have copped to their role in a Ponzi scheme in which at least 25 investors were defrauded out of more than $500,000.
Alcibiades Cifuentes and Jennifer Wee Cifuentes to four counts of wire fraud, one count of conspiring to commit wire fraud, and one count of theft. They are set to be sentenced in late February 2020, the U.S. Department of Justice said in a news release.

The fraud charge that both defendants face carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice. Further, the commodities fraud charge could net each a decade in prison and a fine of $1 million.
“They fraudulently induced victims to invest in the foreign currency and commodity markets through Cifuentes Fund Management (CFM), their hedge fund that purportedly invested in foreign currencies. Instead, they almost immediately spent those investment funds on personal items, such as an Audi R8 and jewelry,” the DoJ said.
Background
Specifically, the US regulators said in its complaint that from April 2013 through March 2015, Cifuentes and Wee engaged in a fraudulent scheme that netted nearly $600,000 from victims. ‎While they were actually running a , Cifuentes and Wee claimed that these funds would participate in a commodity pool for trading in a portfolio of ‎financial instruments including forex, commodities and other investments.
In connection with the promotion of their pool, the defendants, using a demonstration account, made a series of materially false claims to lure investors interested in ‎forex trading. The claim was made that pool participants could get extraordinary investment returns.
Instead ‎of using the investors’ monies in trading, the fraudsters allegedly ‎misappropriated all of the pool participants’ funds, which was largely spent on ‎personal expenses such as luxury vehicles, jewelry and clothing among other items. As also ‎charged, they used some new investors’ funds to pay back other investors in a Ponzi-‎like fashion, so that they would invest or refer additional money, thereby ‎allowing the scheme to continue for a longer period of time. ‎