7. Based on my interviews with certain individuals who invested in Paramount Management, and my review of various documents, including documents provided to investors by ALEX V. EKDESHMAN, the defendant, and other employees of Paramount Management, other investor documents, bank records, and my review of the transcript of sworn testimony provided by EKDESHMAN to the CFTC, I have learned that between in or about May 2011 and May 2013, Paramount Management solicited and collected approximately $1.58 million from approximately 115 investors. EKDESHMAN and Paramount Management employees working for EKDESHMAN represented to investors that these funds would be used for the purpose of foreign currency exchange transactions ("forex"). Contrary to these representations, the majority of investors' funds, at least approximately $1,077,722, was never traded in forex. Instead, contrary to what investors were told, the major portion of investors' funds was misappropriated by EKDESHMAN and used to pay EKDESHMAN's personal expenses and for business expenses related to Paramount Management.
a. During the period from approximately May 2011 up to and including May 2013, Paramount Management received approximately $1.58 million in investor funds from approximately 115 different investors, in the form of wire transfers and checks, including from Victim-1, Victim-2, Victim-3, Victim-4, Victim-S, Victim-6, Victim-7, and Victim-8, described below, which were deposited into the Paramount Management Bank Accounts. A large portion of the $1.58 million in investor funds, at least approximately $1,077,722, was never invested in forex.b. According to EKDESHMAN's sworn testimony to the CFTC, there were only two ways that he invested customer funds in forex. He stated that: (i) he invested customer funds by sending them through a company called Executive Management, Inc., which in turn invested the funds through a retail foreign exchange dealer located in the United Kingdom called Alpari UK; and (ii) he invested customer funds by sending them through a bank account in Belize, in the name of Paramount Management Ltd., which in turn invested the funds through a retail foreign exchange dealer located in Mauritius named ACM Gold. However, based on my review of bank records, I have learned that, during the relevant time period, at most a total of approximately $502,440 was sent to either Executive Management, Inc., to the Paramount Management Ltd. bank account in Belize, or directly to ACM Gold.c. Instead, a large portion of the funds in the Paramount Management Bank Accounts was misappropriated and used to pay EKDESHMAN's personal expenses and business expenses for Paramount Management. For example, based on my review of the records for the Paramount Management Bank Accounts, from about May 2011, up to and including at least in or about May 2013: (i) EKDESHMAN paid approximately $71,100 to himself and paid approximately $6,600 to his wife from the Paramount Management Bank Accounts; ( ii) EKDESHMAN made approximately $139,546 in debit card purchases for what appear to be personal or business expenses from the Paramount Management Bank Accounts; (iii) EKDESHMAN made payments totaling approximately $436,956 in payroll expenses to Paramount Management employees from the Paramount Management Bank Accounts; and (iv) EKDESHMAN made payments totaling approximately $176,953 in rent expenses for Paramount Management and $10,000 in personal home rental expenses from the Paramount Management Bank Accounts.d. The financial analysis conducted by myself and the FBI forensic accountant covers the entire period from the opening of the Paramount Management Bank Accounts until approximately May 2013. During that time period, a total of approximately $1.94 million was deposited into the Paramount Management Bank Accounts, of which approximately $1.58 million consisted of investor funds.
[W]e are here to announce a major law enforcement action against international financial institutions that for years participated in a brazen display of collusion and foreign exchange rate market manipulation - and will, as a result, pay a total of nearly $3 billion in fines and penalties. Today's historic resolutions are the latest in our ongoing efforts to investigate and prosecute financial crimes, and they serve as a stark reminder that this Department of Justice intends to vigorously prosecute all those who tilt the economic system in their favor; who subvert our marketplaces; and who enrich themselves at the expense of American consumers.Starting as early as December 2007, currency traders at several multinational banks formed a group dubbed "The Cartel." It is perhaps fitting that those traders chose that name, as it aptly describes the brazenly illegal behavior they were engaged in on a near-daily basis. For more than five years, traders in "The Cartel" used a private electronic chatroom to manipulate the spot market's exchange rate between euros and dollars using coded language to conceal their collusion. They acted as partners - rather than competitors - in an effort to push the exchange rate in directions favorable to their banks but detrimental to many others. The prices the market sets for those currencies influence virtually every sector of every economy in the world, and their actions inflated the banks' profits while harming countless consumers, investors and institutions around the globe - from pension funds to major corporations, and including the banks' own customers - who placed their faith in the market and relied on it to produce a competitive exchange rate.As a result of our investigation, four of the world's largest banks have agreed to plead guilty to felony antitrust violations. They are Citicorp, JPMorgan Chase & Co., Barclays PLC, and The Royal Bank of Scotland PLC. These four banks have acknowledged their role in this conspiracy and committed to changing their corporate cultures starting at the highest levels. They have also agreed to pay criminal fines totaling more than $2.5 billion - the largest set of antitrust fines ever obtained in the history of the Department of Justice. And the fine that Citicorp alone will pay - $925 million - is the largest single fine ever imposed for a violation of the Sherman Act. These unprecedented figures appropriately reflect the conspiracy's breathtaking flagrancy, its systemic reach and its significant impact.A fifth bank, Switzerland's UBS AG, has agreed to plead guilty and pay a $203 million criminal penalty for breaching the non-prosecution agreement it entered in December 2012 regarding manipulation of the London Interbank Offered Rate, or LIBOR - a benchmark interest rate used worldwide. The breach of the NPA was based in part on UBS's fraudulent and deceptive currency trading and sales practices related to foreign exchange markets, its collusion with other participants in the FX markets and its failure to take adequate action to prevent unlawful conduct after prior civil, criminal and regulatory resolutions. In other words, UBS promised, in other resolutions, not to commit additional crimes - but it did. . .
It is troubling enough to consistently grant waivers for criminal misconduct. It is an order of magnitude more troubling to refuse to enforce our own explicit requirements for such waivers. This type of recidivism and repeated criminal misconduct should lead to revocations of prior waivers, not the granting of a whole new set of waivers. We have the tools, and with the tools the responsibility, to empower those at the top of these institutions to create meaningful cultural shifts, yet we refuse to use them.In conclusion, I am troubled by repeated instances of noncompliance at these global financial institutions, which may be indicative of a continuing culture that does not adequately support legal and ethical behavior. Further, I am concerned that the latest series of actions has effectively rendered criminal convictions of financial institutions largely symbolic. Firms and institutions increasingly rely on the Commission's repeated issuance of waivers to remove the consequences of a criminal conviction, consequences that may actually positively contribute to a firm's compliance and conduct going forward.