The Commodity Futures Trading Commission today announced Senior Judge David C. Guaderrama of the U.S. District Court for the Western District of Texas entered an order on July 9, assessing monetary relief totaling over $31 million against Abner Alejandro Tinoco and his company Kikit & Mess Investments, LLC.
The order requires Tinoco and Kikit & Mess, both formerly of El Paso, Texas, to pay, jointly and severally, $6,203,792.18 in restitution to 199 defrauded victims; $6,257,904.89 in disgorgement with dollar for dollar credit for any restitution payments to victims; and a $18,773,714 civil monetary penalty, which is three times the amount of unlawful gains from their fraudulent foreign currency (forex) and cryptocurrency scheme.
On March 25, 2022, the court entered an initial consent order of permanent injunction against Tinoco and Kikit & Mess prohibiting them from future violations of the Commodity Exchange Act (CEA) and CFTC regulations and banned them from trading in any CFTC-regulated markets and registering with the CFTC. [See CFTC Press Release No. 8507-22]
Additionally, the initial consent order found the defendants engaged in a fraudulent scheme commencing in September 2020 and accepted more than $7.2 million of investment funds from clients and paid bogus “investment profits” to other clients in a manner akin to a Ponzi scheme. The order found the defendants did not invest their clients’ funds as represented and instead used them to pay Tinoco’s personal expenses including the travel costs for chartering a private jet, the purchase of a luxury mansion and other real estate, and the purchase or lease of luxury automobiles.
The initial consent order and the order entering monetary relief resolve the CFTC’s September 28, 2021 enforcement action against Tinoco and Kikit & Mess. [See CFTC Press Release No. 8452-21]
Parallel Criminal Action
On November 29, 2022, the Department of Justice charged Tinoco, in the Western District of Texas, with five counts of wire fraud based, in part, on the same conduct alleged in the CFTC’s complaint. [United States v. Tinoco, Case No. EP:22-CR-01933-DCG(1) (W.D. Tex. Nov. 29, 2022).] On February 29, Tinoco plead guilty to these charges and was sentenced to 84 months in prison and an additional three years of supervised release. He was also ordered to pay $9,023,695.77 in restitution to victims. Tinoco is presently serving his sentence at the Federal Correctional Institution in Safford, Arizona.
The CFTC thanks the receiver in this action, Kelly Crawford of the law firm Scheef & Stone, L.L.P., for his assistance in this action.
The Division of Enforcement staff responsible for this case are Susan B. Padove, Heather J. Dasso, Matthew Edelstein, Elizabeth M. Streit, Scott Williamson, and Robert Howell, and former CFTC employee David Terrell.
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CFTC’s Commodity Pool and Forex Fraud Advisories
The CFTC has issued several customer protection Fraud Advisories and Articles that provide the warning signs of fraud, including the Commodity Pool Fraud Advisory and the Forex Fraud Advisory, which alert customers these types of fraud and list simple ways to spot them.
The CFTC also strongly urges the public to verify an individual or company’s registration with the CFTC before committing funds. If unregistered, a customer should be wary of providing funds to that company or individual. A company’s or individual’s registration status can be found using NFA BASIC.
Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382), file a tip or complaint online, or contact the Whistleblower Office.
Whistleblowers may be eligible to receive between 10 and 30 percent of the monetary sanctions collected, paid from the Customer Protection Fund which is financed through monetary sanctions paid to the CFTC by violators of the CEA.
