US court orders $209M payment over Ponzi schemes

ISTANBUL

A federal court in the US ordered an individual and several companies to pay more than $209 million in monetary sanctions for commodity pool Ponzi schemes, the Commodity Futures Trading Commission (CFTC) said Tuesday.

Judge Mary Rowland of the US District Court for the Northern District of Illinois requires the defendants to pay $83.7 million in restitution to customers of the so-called income fund; $36.9 million in disgorgement of unlawful gains, offset by any amounts paid in restitution; and a $110.9 million civil monetary penalty.

The final judgment includes Sam Ikkurty in the state of Oregon and Jafia, LLC, Ikkurty Capital, LLC d/b/a Rose City Income Fund I LP, Rose City Income Fund II, and Seneca Ventures, LLC.

The CFTC said the defendants’ fraudulent scheme centered on Ikkurty’s misrepresentations to participants about the nature of his “crypto hedge funds” and the supposed “net profits” they would earn.

In reality, however, Ikkurty did not return any net profits to participants and instead “ran something akin to a Ponzi scheme," it said in a statement. "Ikkurty also misstated his fund’s historical performance and omitted the fact the fund fell in value by 98.99% in only a few months."

The CFTC said it also recovered more than $18 million in digital assets that had been stolen from the court-appointed receiver.

"The defendants portrayed their programs as cutting-edge crypto and carbon investments, when in reality, they were plain, old-fashioned Ponzi schemes," CFTC Director of Enforcement Ian McGinley said in the statement.

"CFTC staff not only shut down the defendants’ fraudulent schemes and obtained a money judgment of over $200 million, they also recovered more than $18 million in stolen digital assets that may otherwise have been lost forever," he added.