Release: 5265-06

For Release: December 19, 2006

15 Defendants from “Operation Wooden Nickel” Ordered by the Court to Pay Restitution, Return Ill-Gotten Gains, and Pay Fines Totaling over $25 Million

The Honorable George Daniels of the U.S. District Court for the Southern District of New York Finds that these 15 Defendants Committed Fraud and/or Received Ill-Gotten Gains From the Sale of Illegal Off-Exchange Foreign Currency Futures Contracts

Washington, D.C.— The U.S. Commodity Futures Trading Commission (CFTC) announced today that the Honorable George Daniels of the United States District Court for the Southern District of New York entered orders imposing monetary sanctions totaling over $25 million, permanent injunctions and other relief against 15 defendants. These orders stem from a cooperative law enforcement investigation code-named Operation Wooden Nickel conducted by the CFTC, the Federal Bureau of Investigation, the Department of Justice, and the Securities and Exchange Commission.

These 15 defendants and others were sued by the CFTC on November 18, 2003, in six civil injunctive actions for engaging in fraud in the sale and solicitation of illegal foreign currency (forex) futures contracts and/or for receiving ill-gotten gains from the sale of these forex contracts. (See CFTC News Release 4867-03, November 19. 2003.)

Madison Deane, et al., Docket No. 03-CV-9128

The court found that defendants Ian Bursztyn of Commack, NY, Mazen Abdeldayem of Brooklyn, NY, Damon Ripley of Brooklyn, NY, New York Capital Assets, Inc., Matthew Salinas of Brooklyn, NY, and others participated in a scheme to defraud and misappropriate funds received from the retail public for the purpose of trading off-exchange foreign currency contracts. The court entered default judgments and sanctions against Bursztyn, Abdeldayem, Ripley, and New York Capital Assets. Bursztyn was ordered to pay $12,059,480 in restitution and to pay a $240,000 civil monetary penalty. Abdeldayem was ordered to pay $30,427 in restitution and to pay a $120,000 civil monetary penalty. Ripley and New York Capital Assets were ordered jointly and severally to pay $226,522 in restitution, and each was ordered to pay a civil monetary penalty in the amount of $240,000. Salinas entered into a consent order with the CFTC and has been ordered by the court to pay a $42,000 civil monetary penalty and disgorge ill-gotten gains in the amount of $14,000. In addition, the court imposed permanent trading and registration bans against each of these defendants.

ISB Clearing Corporation, et al, Docket No. 03-CV-9127

The court found that defendant Bursztyn and others repeatedly filed false financial reports with the National Futures Association that contained false statements about the amount and location of customer funds. The court entered a default judgment and sanctions against Bursztyn, imposed a $120,000 civil monetary penalty and ordered the same restitution payment as noted above in the Madison Deane matter. Accordingly, the payment of restitution in the Madison Deane matter noted above satisfies the restitution obligation in this matter.

Walter Scott Lev, et al., Docket No. 03-CV-9126

The court found that Michael Korobov of New York, NY, and others received millions of dollars from customers to trade illegal off-exchange foreign currency futures contracts on their behalf and then misappropriated a substantial portion of those funds. The court further found that relief defendants Michael Edwards Trading Group, Ltd., JSG Freight Systems, Inc., Shuster, Shuster Shuster, Ltd., BLJ Consulting, Inc., Winn Industries Division of Ontario, Ltd., and The Fuzzy Group, Inc. illegally obtained funds pursuant to this scheme and ordered them to disgorge those funds. Korobov and The Fuzzy Group entered into consent orders with the CFTC settling the matters against them. The court entered default judgments and sanctions against the remainder of these relief defendants. The court ordered Korobov to pay $6,800,951 million in restitution, assessed a $240,000 civil monetary penalty and imposed permanent trading and registration bans against Korobov. The court further ordered the remaining relief defendants to disgorge the $2,867,582 in illegally obtained funds they collectively received pursuant to this scheme.

Ian Bursztyn, et al., Docket No. 03-CV-9125

The court found that Defendants Anthony Iannuzzi of Goshen NY, Ian Bursztyn, John Capuano of Brooklyn, NY, and others engaged in a scheme to defraud and deceive banks by converting funds belonging to the banks through a series of illegal foreign currency futures transactions and concealing the conversion from the banks. The court entered default judgments and sanctions against Iannuzzi, Bursztyn and Capuano. Iannuzzi was ordered to pay $447,314 in restitution and to pay a $240,000 civil monetary penalty. Bursztyn was ordered to pay a $120,000 civil monetary penalty, and Capuano was ordered to pay a $120,000 civil monetary penalty and to disgorge ill-gotten gains in the amount of $12,700. The court also imposed permanent trading and registration bans against Iannuzzi, Bursztyn and Capuano.

Itradecurrency USA, et al., Docket No. 03-CV-9129

The court found that defendant Anthony Iannuzzi and others fraudulently obtained funds from customers for the purpose of trading illegal off-exchange foreign currency contracts and that instead of actually trading clients’ funds, Iannuzzi and others misused and misappropriated a substantial portion of these funds without any investment made in foreign currency contracts. The court entered a default judgment against Iannuzzi and ordered him to pay $970,573 in restitution and a $240,000 civil monetary penalty. The court also imposed permanent trading and registration bans against Iannuzzi.

First Lexington Group, et al., Docket No. 03-CV-9124

The court found that relief defendant Natalia Roumiantseua of Queens, NY, illegally received $20,000 of funds that were fraudulently solicited from the public to trade illegal off-exchange foreign currency futures contracts. The court entered a default judgment against Roumiantseua and ordered her to disgorge the $20,000 in funds she illegally received.

The CFTC would like to thank the FBI, the U.S. Attorney’s Office for the Southern District of New York, and the National Futures Association for their assistance.

The following CFTC staff members are responsible for this case: Sheila Marhamati, Joseph Rosenberg, John Cipriani, Phil Rix, Steven Ringer, Lenel Hickson, Stephen J. Obie, Richard Wagner, and Vince McGonagle.

Media Contacts
Alan Sobba
202-418-5080

Dennis Holden
202-418-5088
 

Last Updated: April 18, 2010