United States Attorney
Southern District of New York
U.S. CHARGES 47 AFTER LONG-TERM UNDERCOVER
JAMES B. COMEY, the United States Attorney for the Southern District of New York, and PASQUALE D'AMURO, Assistant Director In Charge of the New York Office of the Federal Bureau Of Investigation ''FBI', announced today the filing in Manhattan federal court of criminal charges against 47 defendants, resulting from an 18-month-long undercover investigation of fraudulent schemes and other criminal conduct principally in the foreign currency exchange, or 'Forex' markets.
The investigation, which was
conducted jointly by the Office of the United States Attorney and the
FBI, in coordination with the Commodities
Futures Trading Commission 'the 'CFTC' and the United States Securities & Exchange
Commission 'the 'SEC', represents law enforcement's most substantial
infiltration into corruption in the Forex markets.
Among the principal
charges announced today are those contained in a criminal Complaint
charging 20 defendants with allegedly participating
in a rigged Forex scheme that has pervaded the Forex markets for some
20 years. According to court documents, the scheme ' referred to by its
participants as the 'Game,' or 'Points For Cash' involved currency
traders at large financial institutions allegedly engaging in rigged
trades that were purposely designed to produce losses for their employers'
accounts, and corresponding profits for the co-conspirators in the rigged
trades. In exchange for orchestrating 'profits' for their counter-parties,
the currency traders allegedly received cash kickbacks, including in
cash-stuffed envelopes delivered to them in diners, the court papers
allege. In just a few months, the undercover investigation revealed approximately
123 rigged trades, totaling in excess of $650,000, and cash pay-offs
to the currency traders totaling hundreds of thousands of dollars.
Of the 47 defendants charged in connection with today's announcement,
40 defendants were taken into custody by the FBI yesterday and today,
2 defendants were previously arrested, and 4 defendants are still being
sought. The defendants in custody are scheduled to be presented before
various United States Magistrate Judges in federal courts in Manhattan
and elsewhere today.
Mr. D'AMURO stated: 'As a trusted business associate of the defendants,
our undercover FBI Agent learned that many of the fraudulent activities
in foreign currency exchange markets had been ongoing for the past 20
years. In fact, they bragged to the Agent that law enforcement would
never be capable of getting close enough to stop them. The FBI Agent
provided us - quite literally - with an inside look into the manipulation
and exploitation of the foreign currency exchange markets. Consistent
with one of the basic rules of the marketplace - 'let the buyer beware'
- the FBI's message to those who seek to manipulate our markets and defraud
investors is simple - BEWARE: The person you are conspiring with may
well be an undercover FBI Agent.'