CFTC Wins $36 Million Judgment Against New York-Based Crypto Scammer

A federal judge has ordered a fraudster to pay over $36 million in fines and restitution for his part in a fraudulent crypto and forex scheme.

According to a September 20 announcement by the U.S. Commodity Futures and Trading Commission (CFTC), William Koo Ichioka was ordered to pay $31 million in restitution to defrauded victims of his scheme, and a further $5 million civil penalty. Ichioka was also barred from trading in CFTC-regulated markets and from registering with the CFTC under the terms of the court order.

Ichioka also pleaded guilty in January to criminal charges leveled by the Department of Justice (DOJ), including charges of wire fraud, preparing false tax returns, securities and commodities fraud. He received a four-year jail sentence alongside the multi-million dollar fines and restitution imposed under the terms of the court order.

Per Ichioka's plea agreement in the criminal case against him, the "Ichioka Ventures" scheme involved defrauding over a hundred investors who believed they would see a 10% return on their investment every 30 business days.

Ichioka presented himself as a "self-made investor" with a "multimillion fortune" who would invest their funds in securities and commodities including cryptocurrency, profiting through crypto arbitrage, futures and derivatives and foreign exchange (forex) currency transactions.

Although he did invest some money in forex and "digital asset commodities," he was found to have commingled investors' funds with his own and used their funds to pay for his own expenses—including "his personal residence, restaurants and bars, grocery stores, taxi and car share rides, retail stores, gym membership fees, and online purchases."

He concealed his fraud from investors with the aid of fake financial documents and false account statements that "overstated the value of assets he held" on their behalf.

“Ichioka lured his victims by falsely promising they would receive huge returns quickly on their investments,” said First Assistant United States Attorney Patrick Robbins in a statement accompanying Ichioka's sentencing on criminal charges. He added that, “During the years that he ran his cryptocurrency-based Ponzi scheme, Ichioka managed to defraud more than 100 investors of tens of millions of dollars. Today’s sentence illustrates that lengthy prison terms await all those who seek to swindle investors in this district.”

Edited by Stacy Elliott.