Forex Fraud Targets Deaf Community

Posted by Phoebe Millano

The U.S. Commodity Futures Trading Commission (CFTC) announced today that it charged Marvin Cooper and his company Billion Coupons, Inc. (BCI), both of Honolulu, Hawaii, with operating a Ponzi scheme that involved more than 125 customers — all of whom are Deaf — in connection with commodity futures trading and foreign currency futures (forex) trading.

The CFTC alleges that since at least September 2007, Cooper and BCI solicited approximately $4.4 million from more than 125 Deaf American and Japanese individuals for the sole purported purpose of trading forex. Also, according to the complaint, while Cooper and BCI opened both forex and futures accounts with approximately $1.7 million of customer money, Cooper misappropriated more than $1.4 million of customer funds for personal use.

Cooper allegedly used the misappropriated funds to purchase computer and electronic equipment, flying lessons, and a $1 million home. He also allegedly returned approximately $1.6 million to customers as purported “profits” and as commissions to employees and agents.

“This case is a clear example of affinity fraud: Cooper preyed upon the Deaf community to leverage and exploit the inherent trust within so that his scheme would prosper. The CFTC urges the public to be cautious with their investments even when opportunities are presented by those with whom they have an association,” said CFTC Acting Director of Enforcement Stephen J. Obie.

Cooper and BCI allegedly lured in customers with promises of 15 to 25 percent monthly returns, depending on the amount and size of the customer’s investment, while representing that the investment would be low risk and that the promised return was produced by their successful trading. Cooper and BCI, however, were running a Ponzi scheme since the purported “profits” paid to customers came from existing customers’ original principal and/or from money invested by subsequent customers.

Finally, the complaint alleges that to conceal and perpetuate their fraud, Cooper and BCI provided customers with false account statements representing that their accounts were increasing by as much as 25 percent, when, in fact, the accounts were collectively losing money every month.