Release: 4842-03
For Release: September 23, 2003

NEW YORK FOREIGN CURRENCY (FOREX) FIRM CHARGED WITH DEFRAUDING 378 INVESTORS OF MORE THAN $7 MILLION IN COMMODITY SCAM

U.S. Commodity Futures Trading Commission Charges Sun Platinum Group LLC and Eduard Dmanskiy With Commodity Scam Involving Offshore Entities; Federal District Court Judge Orders Defendants’ Assets Frozen

WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that on September 12, 2003, a federal district court judge in New York, acting on a CFTC complaint filed earlier that day, issued an order freezing the assets and preventing the destruction of the books and records of defendants Sun Platinum Group LLC (Sun Platinum) of New York City, and Eduard Dmanskiy (Dumanskiy), also known as Edward Dumansky, of Spring Valley, New York.

Sun Platinum and Dumanskiy were charged in the CFTC complaint with fraud for allegedly misappropriating customer funds in a telemarketing scam where retail customers were solicited to trade foreign currency (forex) futures contracts. The CFTC also charged the defendants with trading illegal, off-exchange forex futures contracts.

Specifically, the complaint alleged that since at least January 2003, Sun Platinum and Dumanskiy defrauded at least 378 retail customers by misappropriating the more than $7 million solicited from customers for purported opportunities to speculate on the value of foreign currencies. According to the complaint, instead of trading customer funds, the defendants misappropriated most of the funds by sending the money offshore to banks located in Latvia, Costa Rica, and elsewhere. The complaint alleges that many of these offshore transfers were made to the benefit of relief defendants: Ocaline Int’l Corp.; Hessar Alliance, Inc.; Klondike Int’l, Inc.; Pyrmont Alliance Corp.; Commonwealth Trust Ltd.; and Total Trading Services Ltd. The court-ordered asset freeze also applies to the relief defendants, all of whom appear to be located in foreign jurisdictions.

In its continuing litigation in this matter, the CFTC is seeking a permanent injunction against each defendant, repayment to defrauded customers, return of all ill-gotten gains from the defendants and relief defendants, and monetary penalties for each violation of the Commodity Exchange Act.

The following CFTC Division of Enforcement staff members are responsible for this case: Lael E. Campbell, Jamie Brown, Mary Kaminski, Michael Jones, John Dunfee, Joseph Rosenberg, Paul Hayeck, and Joan Manley.

A copy of the CFTC complaint and restraining order may be obtained at www.cftc.gov.

Media Case Enforcement Contact:
Paul G. Hayeck, Associate Director
CFTC Division of Enforcement
(202) 418-5312

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The CFTC Has Issued A Consumer Advisory Warning the Public of the Risks of Foreign Currency Trading and Foreign Currency Scams

• The CFTC has issued a Consumer Advisory (at www.cftc.gov/cftc/cftccustomer.htm) urging the public to scrutinize claims of high-return, low-risk investment opportunities in foreign currency trading. This Consumer Advisory provides "red flags" to look for, and cautionary steps to be taken before making an investment. The CFTC has also issued Advisories concerning the Commodity Futures Modernization Act of 2000, and how FOREX firms may lawfully offer foreign currency futures and options trading opportunities to the retail public (see CFTC Press Release 4625-02, March 21, 2002, CFTC Advisory, March 21, 2002, and CFTC Advisory 06-01, February 5, 2001). In addition, the CFTC and National Futures Association (NFA) in August 2003 announced new rules to combat fraud in the retail off-exchange foreign currency futures market (see CFTC News Release 4833-03, August 26, 2003).

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