Marat Yunusov and Ayrat Yunusov, are 48-year-old twin brothers from Kazan, Russia. Another thing that the Yunosov twins now share is that on October 19, 2012, they were indicted in Northern District of Illinois on eight counts of wire fraud and two counts of commodities fraud - and arrest warrants are outstanding for both men.
First, the CFTC
In 2010, the United States Commodities Futures Trading Commission had filed a civil lawsuit that prevented the defendants from obtaining $7.2 million in purportedly illicit trading profits. READ the full-text CFTC Complaint .
Well, maybe not necessarily the defendants - as in plural, but I guess the impact was the same nonetheless. You see, oddly enough, at the time of the CFTC's complaint in June 2010, the regulator apparently thought that:
[Marat] Yunusov, who has never been registered with the CFTC, has held himself out to be a Russian national and also uses the name Ayrat Yunusov.
Yeah, you got it: The CFTC thought that there was one and only one Yunusov, and that was Marat, who also used the name of Ayrat.
In the 2010 CFTC action, the regulator had alleged that during the evening of June 3 and the morning hours of June 4, 2010, Yunusov bought and sold on the Chicago Mercantile Exchange ("CME") Group's Globex electronic trading platform thousands of futures contracts in lightly-traded contract-months of the Russian Ruble and E-micro British Pound futures contracts. Yunusov's trading resulted in over $7.8 million in net losses at his Open E Cry account versus some $7.2 million in net profits at Velocity.
On May 4, 2011, the CFTC obtained a federal court consent order imposing a $500,000 civil monetary penalty on Marat Yunusov,and a permanent ban on his engaging in any commodity-related activity within the jurisdiction of the CFTC, including trading and registering with the CFTC in any capacity.
The 2012 Indictment
By October 2012, the feds seem to have figured out that there were twin brothers behind this scheme. The Indictment alleges that the defendants collected their profits from the future commission merchant Velocity while simply failing to pay the $7.8 million loss to merchant Open E Cry.
When you think about it, not a particularly sophisticated scam: Keep the profits and walk away from the losses.
In furtherance of their alleged scheme, the defendants matched their orders for ruble and pound futures contracts in their respective accounts at Open E Cry and Velocity by entering a buy or sell order in one account and, within seconds, entering an opposite but equal quantity buy or sell order in the other account. Further, the defendants entered their orders in the back of the month contracts where trading volume was low to increase the likelihood of matching the trade orders against each other. The Indictment alleges that after testing their scheme in April/June 2010, the defendants calibrated their trades to provide the appearance that profits from pound contract trading covered the losses from the ruble contract trading.
NOTE: The charges in the Indictment are merely allegations and the defendants are presumed innocent unless and until prove guilty beyond a reasonable doubt in a court of law.
Each count of commodities fraud carries a maximum penalty of 25 years in prison; and each wire fraud count carries a maximum of 20 years in prison.
All 10 counts carry a maximum fine of $250,000 fine, and restitution is mandatory. The court may also impose a fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater.