The Commodity Futures Trading Commission today filed a civil enforcement action in the U.S. District Court for the Eastern District of Michigan against Darren Robinson, a former resident of Miami, Florida, and his firm The QYU Holdings Inc. (QYUHI), a Wyoming corporation with a purported principal place of business in Dallas, Texas.
The complaint charges Robinson and QYUHI with fraud, registration, and books and records violations relating to a multimillion-dollar fraudulent scheme which Robinson, individually and as the agent of QYUHI, solicited and both defendants accepted not less than $7.1 million from customers in the U.S., mainly located in the suburbs of Detroit, Michigan.
In its continuing litigation against Robinson and QYUHI, the CFTC seeks full restitution to defrauded participants, disgorgement of ill-gotten gains, and civil monetary penalties.
Case Background
The complaint charges that from approximately January 1, 2017 to the present (the relevant period), Robinson and QYUHI engaged, and continue to engage, in a multi-million dollar fraudulent scheme which Robinson, individually and as the agent of QYUHI, solicited people to participate in a commodity pool operated by QYUHI to trade in commodity interests, including foreign currency (forex) pairs on a leveraged, margined, or financed basis with participants who are not eligible contract participants (retail forex) and forex futures contracts.
Instead of trading pool participants’ funds, Robinson and QYUHI misappropriated all of the pool participants’ funds by depositing them directly into QYUHI’s corporate bank account that Robinson controlled, rather than depositing the funds directly into an account carried in the name of the pool at a futures commission merchant and/or a retail foreign exchange dealer. Robinson and QYUHI misappropriated, and continue to misappropriate, participants’ funds to pay Robinson’s personal expenses, including, but not limited to luxury cruises, airfare, vehicles, as well as real property purchases, credit cards payments, and other daily living expenses. Additionally, Robinson used approximately $1,272,850 of later-in-time participants’ funds to pay earlier-in-time participants purported “profits” and/or “redemptions” in the nature of a Ponzi scheme.
The complaint further charges that throughout the relevant period, QYUHI acted at all times, and continues to act, as a commodity pool operator (CPO) without being registered with the CFTC as a CPO as required, and Robinson acted at all times, and continues to act, as an associated person (AP) of a CPO without being registered with the CFTC as an AP of a CPO as required. Also, QYUHI failed to provide required disclosures and reports and keep and maintain books and records as required by a CPO.
The CFTC cautions victims that restitution orders may not result in the recovery of money lost, because the wrongdoers may not have sufficient funds or assets.
Related Criminal Matter
In a separate criminal action, the U.S. Attorney’s Office for the Eastern District of Michigan filed a criminal complaint against Robinson charging him with wire fraud in connection with this scheme.
The CFTC appreciates the assistance of the U.S. Attorney’s Office for the Eastern District of Michigan and the Federal Bureau of Investigation.
Division of Enforcement staff responsible for this case are Timothy J. Mulreany, George H. Malas, Kassra Goudarzi, and Paul G. Hayeck.
* * * * * *
CFTC’s Forex Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories and Articles that provide the warning signs of fraud, including the Foreign Currency Trading (Forex) Fraud Advisory, which alerts customers to forex fraud and lists simple ways to spot forex scams.
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 individual or 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), 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 financed through monetary sanctions paid to the CFTC by violators of the CEA.
