Federal Judge Orders $36 Million Fine In Crypto Fraud Scheme Case

A federal judge has recently ordered Koo Ichioka Wlliam, a 30-year-old New York resident, to pay $36.4 million for his participation in a crypto fraud operation in which investments in cryptocurrency as well as Forex trading were misappropriated.

The verdict was given by Judge Vince Chhabria of the U. S. District Court for the Northern District of California where Ichioka was ordered to make a restitution of $31 million to the victims and another $5 million in civil penalties according to the U. S. Commodity Futures Trading Commission (CFTC).

Federal Judge Orders $36 Million Fine In Crypto Fraud

Ichioka was charged by the CFTC in June of 2023 for operating a fraudulent crypto and forex scheme that duped investors. He misled investors to expect 10% returns every 30 business days through his commodity pool but instead used the funds for his personal needs, including buying watches, jewelry, and vehicles.

The federal judge’s order stated that Ichioka co-mingled the investor funds with his own and prepared fraudulent financial statements that overstated the value of the investments.

The fraud started in 2018 and even though some of the money was used to invest in forex and digital assets, much of it was used to cater for Ichioka’s personal needs like rent and dining. The action taken by CFTC is to ensure that the innocent victims of Ichioka’s fraud receive some form of compensation while at the same time deterring other would be fraudsters from defrauding would be investors in the same manner.

Criminal Charges and Sentencing

In conjunction with the CFTC’s action, Ichioka was charged with criminal offences by the U.S. Attorney’s Office for the Northern District of California and the U.S. Securities and Exchange Commission. On June 22, 2023, he was indicted for wire fraud, securities fraud, commodities fraud and filing of false tax returns. 

This led to Ichioka entering a plea of guilty on the same day and received a four year term of imprisonment together with five years of supervised release. He was also fined $5 million and was also made to pay a restitution of over $ 31 million.

The sentencing concludes several legal processes against Ichioka as he has been found guilty of being involved in the crypto fraud scheme that took place for a few years and targeted many investors.

CFTC Issues Warnings on Investment Fraud

The CFTC remains vigilant in warning the public about the dangers of investment fraud in the cryptocurrency and forex sectors. The agency has urged the public to check on the CFTC registry of any individual or company before making an investment. In case an entity is not registered, it is suggested that the investors exercise caution and should not invest funds.

Additionally, the CFTC encourages the public to report suspicious activities or possible violations of commodity trading laws. Whistleblowers can receive rewards from the CFTC’s Customer Protection Fund, which is financed through monetary sanctions paid by violators.

Concurrently, underscoring the growing risks of fraud, the Indian Supreme Court’s official YouTube channel was recently hacked. The hackers deleted previous content and used the platform to promote a fake investment scheme involving Ripple and XRP, featuring a deepfake video of Ripple CEO Brad Garlinghouse. The channel has since been removed by YouTube for violating its guidelines, and efforts are underway to restore its original state. Ripple has previously warned of the increasing use of scams and deepfakes in the crypto space, urging investors to remain vigilant.

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Kelvin Munene Murithi

Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.

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