The Commodity Futures Trading Commission today filed a civil enforcement action in the U.S. District Court for the Northern District of California charging William Koo Ichioka, a New York City resident, with fraudulently soliciting and misappropriating more than $21 million from over 100 commodity pool participants’ funds.
Ichioka does not contest his liability on the CFTC’s claims, and has agreed to the entry of a proposed consent order of judgment admitting his liability on the charges in the complaint. In its continuing litigation, the CFTC seeks full restitution to defrauded pool participants, a civil monetary penalty, permanent trading and registration bans, and permanent injunctions against further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
“The CFTC is committed to aggressively pursuing individuals who defraud public investors in digital assets and retail foreign currency [forex] transactions,” said Director of Enforcement Ian McGinley. “The CFTC will strive to hold such wrongdoers fully accountable for their misconduct as we work cooperatively with our law enforcement partners to protect unsuspecting fraud victims.”
Case Background
The order finds Ichioka operated a fraudulent scheme from 2018 through November 2021, where he solicited tens of millions of dollars from more than a hundred individuals to trade digital asset commodities, including bitcoin and ether, and to enter into forex through a commodity interest pool he operated under the name Ichioka Ventures. Its website described the investment as having a term of “30 business days with a 10% return,” while assuring participants their funds could easily be withdrawn or reinvested. Ichioka ultimately misappropriated more than $21 million of participant funds, and used those funds to pay back other participants, and for his personal use and expenses, such as luxury automobiles, jewelry and rent payments.
The CFTC cautions that orders requiring payment of funds to victims may not result in the recovery of any money lost because wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
Parallel Criminal and SEC Actions
Today the United States Attorney’s Office for the Northern District of California also filed a criminal complaint against Ichioka charging him with multiple criminal counts, including wire fraud, filing false or fraudulent tax returns, and securities and commodities fraud in connection with this scheme. The Securities and Exchange Commission also filed a parallel action today.
The CFTC appreciates the assistance of the U.S. Attorney’s Office for the Northern District of California, the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, and the Securities and Exchange Commission.
The Division of Enforcement staff responsible for this matter are Susan B. Padove, Joseph Patrick, David Terrell, Scott Williamson and Robert Howell.
CFTC’s Commodity Pool Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories and Articles, including the Commodity Pool Fraud Advisory, which warns customers about a type of fraud that involves individuals and firms, often unregistered, offering investments in commodity pools, and the Forex Trading Fraud Advisory, to help customers identify these scams.
The CFTC also strongly urges the public to verify a company’s registration with the CFTC before committing funds. If unregistered, a customer should be wary of providing funds to that entity. A company’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) or file a tip or complaint online or contact the Whistleblower Office. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected, paid from the Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.
