July 12, 2011

CFTC Obtains Default Judgment and Permanent Injunction against Florida Resident David L. Ortiz and His Companies for Defrauding Customers in Off-Exchange Foreign Currency Scam

Court orders defendants to pay more than $1 million in sanctions and customer restitution and permanently bars them from the commodities industry.

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge K. Michael Moore of the U.S. District Court for the Southern District of Florida entered an order of default judgment and permanent injunction against David L. Ortiz of Vero Beach, Fla., and his companies, Goyep International, Inc. (Goyep) of Vero Beach, Fla., and Royal Returns, Inc. of Hollywood, Fla. The order stems from a CFTC enforcement action filed on February 23, 2011 that charged the defendants with defrauding customers in an off-exchange foreign currency (forex) scam and with misappropriating customer funds (see CFTC New Release 5992-11).

The court order requires Ortiz, Goyep, and Royal Returns jointly and severally to pay $292,676.62 in restitution and a civil monetary penalty of $878,000. The court also ordered Ortiz’s wife, Loredana Ortiz, and her company, Natural Health Matters, L.L.C. of Pembroke, Fla., named as relief defendants to jointly and severally disgorge $20,604 of ill-gotten gains they received as a result of the unlawful conduct and to which they were not entitled.

The order permanently bars Ortiz, Goyep, and Royal Returns from engaging in any commodity-related activity, including trading and registering or seeking exemption from CFTC registration, and from violating the anti-fraud provisions of the Commodity Exchange Act. The order also requires the defendants to remove from the Internet all websites they posted or authorized to be posted that solicit customers to trade commodity futures or forex.

The order finds that, since May 2008, Goyep and Royal Returns, acting through Ortiz, fraudulently solicited 11 customers by guaranteeing monthly profits of 10 percent and falsely representing that such returns would be produced by successful forex trading. In fact, nearly all defendants’ forex trading resulted in substantial losses, according to the order.

Customers were not able to withdraw their invested funds from defendants because funds were either lost trading, paid to other customers because the defendants operated a Ponzi scheme, or misappropriated, according to the order. Ortiz, Goyep, and Royal Returns misappropriated $313,280 of the $491,446 that customers gave them to trade forex by using those funds for personal expenses, the order finds. Additionally, the order finds that the defendants had some customers send their funds directly to the relief defendants.

The CFTC Division of Enforcement staff members responsible for this case are Susan B. Padove, Joy McCormack, Elizabeth Streit, Scott Williamson, Rosemary Hollinger, and Richard B. Wagner.

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Last Updated: July 12, 2011