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Commodities Fraud Investment Scheme Costs Investors $23 Million, Nets Woman 3 Years’ Jail

Commodities Fraud Investment Scheme Costs Investors $23 Million, Nets Woman 3 Years' Jail 4

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Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that HAENA PARK was sentenced in Manhattan federal court to three years in prison for defrauding investors of more than $23 million.  PARK pled guilty on January 13, 2017, to one count of commodities fraud before U.S. District Judge Ronnie Abrams, who also imposed today’s sentence.

 

Acting Manhattan U.S. Attorney Joon H. Kim stated:  “Haena Park lied to investors about her expertise as a foreign exchange trader and about her returns.  To conceal her scheme and to forestall redemptions, she fabricated account statements and also paid early investors with money from new investors.  For defrauding her customers of more than $23 million – representing many investors’ life savings – Haena Park has been sentenced to significant prison time.”

According to the Indictment and other filings in Manhattan federal court, and statements made in today’s proceedings:

From September 2009 through June 2016, PARK raised more than $23 million from more than 40 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, through the use of her firms, Phaetra Capital Management LP and Argenta Group, LLC.  In connection with the scheme, PARK made a series of false and misleading representations to investors, including that PARK was an accomplished forex trading adviser 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 September 2009 through 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 defrauded many victims – including immigrants, the elderly, and disabled individuals – of nearly the entirety of their life savings.

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In addition to her prison term, PARK, 41, of New York, New York, was sentenced to three years of supervised release and a forfeiture money judgment in the amount of $23,186,860. A restitution order will be entered within 90 days.

 

Mr. Kim praised the work of the Department of Homeland Security, Homeland Security Investigations and the El Dorado Task Force.  He also thanked the Commodity Futures Trading Commission and the Securities and Exchange Commission for their assistance.

 

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Christine I. Magdo is in charge of the prosecution.

 

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