The Commodity Futures Trading Commission today announced Judge Vince Chhabria of the U.S. District Court for the Northern District of California entered an order Sept. 19 assessing monetary relief totaling over $36 million against William Koo Ichioka, a New York resident formerly of San Francisco. The order requires Ichioka to pay $31 million in restitution to defrauded victims and a $5 million civil monetary penalty in connection with his fraudulent foreign currency (forex) and digital asset fraud scheme.
On Aug. 14, 2023, the court entered an initial consent order of permanent injunction against Ichioka, prohibiting him from future violations of the Commodity Exchange Act (CEA) and CFTC regulations and banning him from trading in any CFTC-regulated markets and from registering with the CFTC. This initial consent order and the order entering monetary relief announced today resolve the CFTC’s enforcement action against Ichioka. [See CFTC Press Release No.8727-23]
Additionally, the initial consent order found the defendant engaged in a fraudulent scheme beginning in 2018 in which he accepted investment funds from participants with false claims of a 10% return every 30 business days. Although Ichioka invested some funds in forex and digital asset commodities, he commingled participant money with his own funds and used participant funds for his own personal expenses, including, among other things, rent for his personal residence, jewelry, including watches, and luxury vehicles. To conceal his fraudulent activity, Ichioka overstated the value of assets he held by generating false financial documents and presenting false account statements to participants.
Parallel Criminal Action
On June 22, 2023, the Department of Justice charged Ichioka with one count of wire fraud, two counts of preparing false tax returns, one count of fraud in connection with the purchase and sale of securities and one count of commodities fraud, all based on the same conduct alleged in the CFTC’s complaint. [United States v. William Koo Ichioka, Case No. 23-cr-00190-VC (N.D. Cal. June 22, 2023).] Ichioka pled guilty to these charges the same day. Ichioka subsequently was sentenced to 48 months in prison, given an additional term of 5 years of supervised release, and ordered to pay a $5 million fine, and $31,330,715.86 in restitution to victims.
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 case are Susan B. Padove, Joseph Patrick, Elizabeth M. Streit, Scott Williamson and Robert Howell and former CFTC employee David Terrell.
* * * * * *
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 financed through monetary sanctions paid to the CFTC by violators of the CEA.
