The US Commodity Futures Trading Commission (CFTC) today announced that the US District Court for the Western District of North Carolina entered an order of default judgment and permanent injunction against Barki, LLC of Mint Hill, N.C.
The order, entered on 30 September, 2011, stems from a CFTC enforcement action filed on 17 March, 2009 that charged Barki and Bruce C. Kramer (Kramer) with fraudulent solicitation and misappropriation in a USD38 million leveraged foreign currency (forex) Ponzi scheme perpetrated by Kramer (see CFTC New Release 5635-09, 18 March, 2009).
The court’s order imposes restitution of USD19,960,649 and a civil monetary penalty of USD20,944,707 on Barki and imposes permanent trading and registration bans against Barki, among other sanctions. The order also requires relief defendant Forest Glen Farm, LLC of North Carolina, a company Kramer registered to purchase his residence and a horse farm, to disgorge USD1.35 million in ill-gotten gains it received as a result of Kramer’s fraudulent conduct.
In addition, the CFTC obtained a federal court consent order from the same court requiring disgorgement from relief defendant Rhonda Kramer (R. Kramer) for any customer funds she obtained through Kramer’s fraudulent conduct. The consent order, entered on September 27, 2011, recognizes that the Receiver appointed by the court in this case had collected funds from R. Kramer which satisfies her disgorgement obligations under the consent order.
The Default Order Finds that Kramer Fraudulently Solicited Least USD38 Million from 79 Customers by Touting his Success in Trading Forex
The default order finds that, from June 2004 through February 2009, Kramer fraudulently solicited at least USD38 million from 79 customers by touting his success in trading forex. Of the USD38 million solicited, Kramer deposited approximately USD17.5 million for trading forex and sustained trading losses of USD10 million, the order finds. Kramer used the bulk of the funds to pay purported profits and to return principal to customers, and for extravagant personal uses, such as a 48-acre horse farm, a 6,000 square foot residence, artwork, luxury automobiles including a Maserati, and extravagant parties, the order finds. Kramer concealed his fraud by issuing false account statements to customers. His fraud became known upon his death in February 2009.
Joseph W. Grier, III was appointed Receiver in this action and has distributed USD3,250,369 in receivership funds to Barki customers.
