The Commodity Futures Trading Commission recently unsealed an action in Florida federal court accusing five men of operating a Ponzi scheme that raised at least $75 million from at least 650 investors nationwide. The action, filed in the Middle District of Florida, charges Michael DaCorta, Joseph S. Anile, II, Raymond P. Montie III, Francisco “Frank” Duran, John Haas, and various entities with violations of the Commodity Exchange Act and seeks various relief including a permanent injunction, disgorgement of ill-gotten gains, restitution, and imposition of civil monetary penalties. A temporary receiver was also appointed at the Commission’s request to marshal assets for the benefit of defrauded victims.
The Complaint alleges that the Defendants operated several entities, Oasis International Group Ltd., Oasis Management LLC, and Satellite Holdings Company, collectively as “Oasis” and began soliciting victims in mid-2014 to invest in two commodity pools - Oasis Global FX, Limited (“Oasis Pool 1”) and Oasis Global FX, SA (“Oasis Pool 2” (collectively, the “Oasis Pools”) with promises of minimum 12% annual returns derived from trading forex. Potential “lenders,” as investors were called in an apparent effort to avoid implicating federal securities laws, were told that the Oasis Pools had never had a losing month (indeed, one Defendant allegedly claimed the operation had never had a down day), that there was no risk of loss, and that the only way forex trading could be a bad investment was “if all the banks in the world closed.” Oasis also allegedly offered a referral program designed to incentivize the recruitment of new investors.
Potential investors were told that DaCorta was the “brains of the operation” who was able to obtain consistent returns by trading forex, with the Oasis Pools purportedly returning 22% in 2017 and 21% in 2018. Investors were also told that the guaranteed annual return of 12% was a minimum return, as investors would also be entitled to share the daily profits their funds purportedly generated from trading. Oasis also allegedly made numerous representations concerning the safety of investor funds, including Defendant Duran’s purported statements that Oasis owned at least $15 million in real estate and precious metals that served as collateral for its investments and that “the Oasis Pools’ trading platform could not lose money unless there was a bigger problem in the financial markets and people were going to supermarkets with shotguns.” Investors were received regular account statements showing the purported growth of their account. Oasis ultimately raised roughly $75 million from at least 650 investors nationwide (despite claiming on its website that it was not open to U.S. investors).
According to the Commission, however, all of these claims were false and designed to conceal Oasis’s operation of a classic Ponzi scheme by paying fictitious returns using investor funds. For starters, the Commission alleges that potential investors were not told that DaCorta was effectively permanently banned from the forex trading industry in 2010 after several rules violations during his time as President of a forex trading firm. While Oasis did engage in some legitimate trading, the Commission alleges that it suffered near total losses of investor funds (and not the consistent above-20% returns in 2017-2018). For example, Oasis’s actual returns in 2017 and 2018 were -45% and -96%, respectively. And contrary to Defendants’ representations regarding the safety of investor funds, the Commission alleges that the forex trades in the Oasis accounts had a 100:1 leverage ratio.
Of the approximately $47 million that was not invested as promised, the Commission claims that Defendants misappropriated those funds to, among other things, make $28 million in Ponzi payments, purchase nearly $8 million of real estate, live a luxurious lifestyle, and make transfers to related third parties.
A copy of the complaint is below: