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June 3, 2016New York, NY, United StatesFinancial Crimes

New York woman arrested for bilking investors out of $23 million in investment scam

NEW YORK — A commodity pool operator has been charged with defrauding more than 20 individual investors out of $23 million. The arrest follows an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) El Dorado Task Force.

HSI special agents arrested Haena Park, 40, of New York, Thursday on commodities fraud and wire fraud charges, stemming from her alleged scheme to defraud investors. Park solicited investments for the purpose of trading in a variety of securities and commodities, including off-exchange foreign currency contacts through the use of false and misleading statements.

HSI Special Agent in Charge Angel M. Melendez said: “It is alleged that Haena Park defrauded investors and covered up millions of dollars in financial losses with fake documents and lies that may devastate the financial security of these victims. HSI and its El Dorado Task Force partners are committed to investigating those who seek to exploit vulnerabilities in the U.S. financial system.”

U.S. Attorney Preet Bharara said: “Haena Park is charged with lying to prospective investors about her remarkably high returns and trading expertise in the forex markets to lure them into investing with her. Through deceit, we’ve alleged, she raised more than $23 million from victims and lost nearly all of it. Then to cover up trading losses, she allegedly sent fictitious statements to investors and used money from new investors to pay other investors back.”

According to the complaint unsealed Thursday in Manhattan federal court:

From in or about January 2010 through in or about June 2016, Haena Park, the defendant, raised more than $23 million from more than 20 individual investors, purportedly for the purpose of trading in a variety of securities and commodities, including equities, futures, and off-exchange foreign currency (“forex”) transactions.  In connection with the scheme, Park made a series of false and misleading representations to investors, including that Park was an accomplished forex trading advisor earning annualized returns as high as 48.9 percent for her investors.

In truth and in fact, Park was not an accomplished forex trader, her trading was consistently unsuccessful, and the trading results emailed to investors by Park were false and did not reflect the trading losses actually incurred by Park. Rather, from in or about January 2010 through in or about June 2016, Park lost approximately $19.5 million of the $20 million that she traded, including in commissions and fees, principally in highly leveraged futures and forex transactions.

To prevent or forestall redemptions by investors, and to continue to raise money from investors to fund her scheme, Park generated fictitious account statements, which she sent to investors on a monthly basis.  Instead of accurately reporting the trading losses Park was suffering, the account statements indicated that the investors were making money nearly every month.  To hide her trading losses, Park used new investor funds to pay back other investors in a Ponzi-like fashion.  In total, Park distributed approximately $3 million back to investors from funds deposited by new investors.

Park is charged with one count of commodities fraud, which carries a maximum sentence of 10 years in prison and a maximum fine of $1 million, or twice the gross gain or loss from the offense; and one count of wire fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Updated: 06/06/2016