FOREX Trading Platform Scam Ends In Guilty Plea

March 19, 2012

Wall Street is filled with bulls, bears, pigs and pigeons. I try. I really try to shoo away the pigeons but despite my best efforts, the con artists out there still snare them. Alas, some men and women just seem disposed to handing over wads of cash with nary a nod in the direction of due diligence.

Sadly, it's happened again.

About a year ago, I wrote: "The Lawyer, Judge, Financial Wizard's Tranche Trading Platform Deal" ("Street Sweeper" July 5, 2011),which reported about 32-year-old Michael L. Rothenberg, an attorney and former judge, who fraudulently induced his victims to invest $1.7 mllion in short-term, high yield investments with international banks - all part of a purportedly sophisticated "trading platform" or "trading facility." Here's how I described Rothenberg's pitch:

In fact, on Monday, March 1, 2010, Rothenberg touted the most amazing of all trading programs, now with a price tag of $1.35 million, and with returns of 300% in fourteen days with the opportunity to participate up to six times in a row in this limited, hush-hush, incredible opportunity. Why, you could earn hundreds of millions of dollars within a few weeks, Rothenberg may well have said, breathlessly.

The air came out of Rothenberg's scam and it ended badly for him and his investors.  Given my publicity about the Rothenberg fraud and my many warnings against investing in trading platform deals, imagine my tired, fatigued surprise when I read about yet another pigeon falling prey to another hawk.

On March 16, 2012, Telson Okhio, 49, an alleged investment advisor and President of Ohio Group Holdings Inc. ("OGH"), an alleged investment firm, pleaded guilty in the United States District Court for the Eastern District of New York in Brooklyn, NY to a charge of wire fraud arising out of an investment scheme, for which he now faces up to 20 years in prison.

According to federal prosecutors, between February and April 2009, Okhio, holding himself out as an investment advisor, solicited an investor in Hawaii for a trading platform in the foreign currency exchange ("FOREX") market.  This FOREX trading platform was going to be funded at $100 million dollars but there was this $5 million piece that hadn't yet been filled and, how lucky, Okhio could get an investor in.

200% profit in four weeks - that was what Okhio promised would be generated.  Oh, but wait, there's more!  This was a riskless investment.

Imagine that.  Some lucky man or woman would be given this incredible opportunity to invest in a FOREX trading platform (whatever the hell that is but, hey, let's not get bogged down in the details, okay?) that would kick out 200% profit within a month and at no risk whatsoever.

Yeah, that sounds absolutely credible and legit to me. Sure it does. Well, lemme put it another way - are you crazy?

Think about - even if just for a minute.  You have $5 million in the bank. Congratulations, you must have done something brilliant in life to earn that sum, or you must have been named in a rich benefactor's will. Before you ever agree to invest in a trading platform that promises three-digit returns in a day, week, weeks, month, months, or a year, get the telephone numbers for a few really large financial services firms.  Note that I didn't say "reputable" firms because given all the shenanigans in the financial markets in recent years, I'm not exactly sure what defines a bank or brokerage firm as reputable but let's put that issue aside for now.

In any event, let's say you have the phone numbers for Goldman Sachs, JP Morgan, Bank of America, Wells Fargo, and Citigroup. Now, get some hot shot from one of those firms on the telephone and tell him or her that you got $5 million burning a hole in your pocket and you're looking for the very, very, very best riskless investment with a triple-digit return.  My guess is that you're going to hear one of three responses over the telephone.

  1. "There's no such thing. Are you looking for a serious recommendation?"
  2. "Who is this?  Is this a prank telephone call?"
  3. The quick click of a telephone receiver being slammed down by someone who thinks that you're insane and wasting his or her time.

Getting back to Okhio's FOREX trading platform investing opportunity of a lifetime, one victim wired $5 million from a bank account in Hawaii to OGH's bank account at a branch of Bank of America in Queens, NY.  Upon receipt of the funds, Okhio wire-transferred $1 million to his personal account at JP Morgan Chase in Queens, NY; and, thereafter, withdrew that $1 million through a series of cash and ATM withdrawals and wire transfers to third parties.

According to federal prosecutors, the scheme resulted in approximately $1 million in losses to the investor.  You hear that sound? It's bags of bird seed being ripped opened, quickly and with eagerness, by a lot of folks getting ready to dine on squab.