The Commodity Futures Trading Commission today announced Judge Linda V. Parker of the U.S. District Court for the Eastern District of Michigan issued an order of default judgment and a permanent injunction 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 order bans Robinson and QYUHI from trading in any CFTC-regulated markets and registering with the CFTC. It also requires them to pay, jointly and severally, $5,923,515.37 in restitution to defrauded victims and a $5,923,515.37 civil monetary penalty in connection with a fraudulent foreign currency (forex) scheme.
Additionally, the order finds from approximately January 1, 2017 to September 28, 2023 (the relevant period), QYUHI acted as a commodity pool operator (CPO) without being registered with the CFTC as a CPO as required, and Robinson acted 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 comply with CPO regulations.
The order resolves the CFTC’s enforcement action Robinson and QYUHI. [See CFTC Press Release 8792-23.]
Case Background
The order stems from a CFTC complaint filed on September 28, 2023. The order finds that during the relevant period, Robinson and QYUHI engaged in a multimillion-dollar fraudulent scheme through which Robinson, individually and as the agent of QYUHI, solicited and Robinson and QYUHI accepted $7,196,365.37 from 38 people to participate in a commodity pool operated by QYUHI for the purpose of trading in commodity interests, including forex pairs on a leveraged, margined, or financed basis with participants who were 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 in the name of the pool at a futures commission merchant and/or a retail foreign exchange dealer. Robinson and QYUHI misappropriated participants’ funds to pay Robinson’s personal expenses, including, but not limited to luxury cruises, airfare, luxury vehicle purchases, real property purchases, credit cards payments, and other daily living expenses. Additionally, Robinson used not less than $1,272,850 of later-in-time participants’ funds to pay earlier-in-time participants purported “profits” and/or “redemptions” in the manner of a Ponzi scheme.
Parallel Criminal Action
On January 11, in the Eastern District of Michigan, Robinson was charged in a 12-count indictment alleging 11 counts of wire fraud and one count of money laundering, for conduct similar to that alleged in the CFTC’s complaint. [See United States v. Robinson, Case No. 2:24-cr-20025-NGE-KGA-1 (E.D. Mich. Jan. 11, 2024).]
Robinson is currently a fugitive from U.S. law enforcement with an active warrant for his arrest that has yet to be executed.
The CFTC cautions that orders requiring repayment of funds to victims may not result in the recovery of any money lost because the 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.
The CFTC appreciates the assistance of the U.S. Attorney’s Office for the Eastern District of Michigan and the Federal Bureau of Investigation.
The Division of Enforcement staff responsible for this case are Timothy J. Mulreany, George H. Malas, Kassra Goudarzi, and Paul G. Hayeck.
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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.
