Michigan Man Admits Role in Worldwide Trading Account Simulator Scheme; Another Conspirator Indicted
Scheme targeted hundreds of investors in more than 30 countries
NEWARK, N.J. – A Michigan man today admitted participating in a scheme to defraud hundreds of investors worldwide of $1.4 million through a purported online day-trading firm, and a co-defendant from Michigan was arrested this morning in connection with the conspiracy, U.S. Attorney Craig Carpenito announced.
Christopher D. Eikenberry, 49, of Birmingham, Michigan, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with one count of conspiracy to commit securities fraud.
Jeffrey E. Goldman, 52, of West Bloomfield, Michigan, who was arrested today in Michigan, is charged by indictment with one count of conspiracy to commit securities fraud and one count of wire fraud. He is scheduled to appear today before U.S. Magistrate Judge David Grande in Detroit federal court.
According to documents filed in the case and statements made in court:
From December 2013 to June 2015, Eikenberry, Goldman, Naris Chamroonrat, Yaniv Avnon, and Ran Armon orchestrated a scheme to defraud hundreds of investors worldwide through their operation of Nonko Trading, a purported day-trading firm. They solicited investors to open accounts with Nonko and to wire thousands of dollars to the firm to fund those accounts. Instead of using the money to fund securities brokerage accounts, the conspirators simply stole it. The conspirators tried to hide the theft by providing the victims with online trading simulator, or “demo,” accounts, and telling the investors they were real accounts to be used for trading securities.
The conspirators selected as victims only those customers who they believed would not be profitable day-traders and would be less likely to seek to withdraw funds from their accounts. They limited the scheme to inexperienced, unsophisticated “losing” traders because those customers would simply believe they lost their money trading in the open markets. If traders on the demo accounts started to appear profitable, Nonko would switch them to real accounts.
The scheme attracted more 260 customers worldwide, including several in New Jersey. Although Nonko paid back a small percentage of these customers, the conspirators stole at least $1.4 million. The majority of the funds were transferred to foreign bank accounts controlled by Chamroonrat and used for personal expenses or other unauthorized transactions, including transferring proceeds of the scheme to the other conspirators.
The conspiracy count carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. The wire fraud count carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing for Eikenberry is scheduled for Dec. 12, 2018.
On May 11, 2017, Chamroonrat pleaded guilty to conspiracy to commit securities fraud in connection with the scheme, one day after a federal grand jury indicted Avnon and Armon, charging them each with one count of conspiracy to commit securities fraud and one count of wire fraud. Those cases currently are pending.
In a separate civil action, the Securities and Exchange Commission today filed an amended complaint in Newark federal court charging Eikenberry and Goldman with, among other things, violating and aiding and abetting violations of the antifraud provisions of the securities laws. The amended complaint seeks a permanent injunction as well as the return of ill-gotten gains plus interest and penalties.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Gregory W. Ehrie, with the investigation. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office under the direction of Regional Director Marc P. Berger for its assistance in the investigation.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit.
The charges and allegations against Goldman, Avnon and Armon are merely accusations, and the defendants are presumed innocent unless and until proven guilty.