CFTC Ordered Prisoned Forex & Crypto Ponzi Scheme Operator to Pay Over $31 Million!

Ben
Sat, 27 Jul 2024 15:06:48 +0000
CFTC, Crypto Schemes, Ponzi, Abner Alejandro Tinoco, Kikit & Mess Investments

While already in prison, the U.S. Commodity Futures Trading Commission (CFTC) has announced that the U.S. District Court for the Western District of Texas has ordered Abner Alejandro Tinoco and his company, Kikit & Mess Investments, LLC, to pay more than $31 million in monetary relief. The court’s order, dated July 9, mandates restitution, disgorgement, and civil penalties for their involvement in a forex and crypto Ponzi scheme.

Key Judgments

The court’s order requires Abner Alejandro Tinoco and Kikit & Mess, both formerly based in El Paso, Texas, to:

Pay $6,203,792.18 in restitution to 199 defrauded victims.

Disgorge $6,257,904.89, with a dollar-for-dollar credit for any restitution payments made.

Pay a $18,773,714 civil monetary penalty, which is three times the amount of their unlawful gains.

Fraudulent Activities

The fraudulent activities by Tinoco and Kikit & Mess were initially addressed on March 25, 2022, when the court issued a consent order of permanent injunction. This order prohibited them from future violations of the Commodity Exchange Act (CEA) and CFTC regulations, banned them from trading in CFTC-regulated markets, and barred them from CFTC registration.

The CFTC’s investigation revealed that from September 2020, Tinoco and his firm operated a fraudulent scheme, accepting over $7.2 million in investment funds from clients. Instead of investing these funds as promised, they used the money to pay bogus “investment profits” to other clients, akin to a Ponzi scheme. The funds were diverted to cover Tinoco’s personal expenses, including luxury travel, real estate purchases, and high-end automobiles.

Criminal Proceedings

Parallel to the CFTC’s action, the Department of Justice charged Tinoco with five counts of wire fraud on November 29, 2022, based on similar allegations. Tinoco pled guilty to these charges on February 29 and received an 84-month prison sentence, followed by three years of supervised release. He was also ordered to pay $9,023,695.77 in restitution. Tinoco is currently serving his sentence at the Federal Correctional Institution in Safford, Arizona.