Israeli Man Charged With Operating FOREX Ponzi Scheme
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that FADI EWIESS, a/k/a “Fadi Awise,” was arrested Saturday morning on wire fraud charges stemming from his participation in a scheme to defraud investors through the operation of a purported foreign exchange (“forex”) trading company. EWIESS was charged with raising over $5.8 million by representing to investors that his company would trade foreign currencies on their behalf, that he would generate high rates of return in so doing, and that his investors’ capital would be guaranteed by third-party financial institutions. Instead of engaging in forex transactions with his investors’ money, however, EWIESS largely spent the money on personal expenses like gambling or making distributions to other investors. EWIESS was arrested Saturday morning in Fort Lauderdale, Florida.
U.S. Attorney Preet Bharara said: “As alleged, Fadi Ewiess lied to prospective investors about his company’s expertise in the foreign exchange markets and sent them forged ‘guarantees’ from New York banks to lure them into investing with him. Through his fraud scheme, Ewiess allegedly raised more than $5.8 million from victims around the globe, spending much of that money on his own gambling and personal expenses.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “As alleged, Ewiess ran a multimillion dollar ponzi scheme under the guise of a foreign exchange trading company. Instead of using investor money for foreign exchanges, Ewiess traveled and gambled the money away or paid investors to continue to invest in his scheme. Making sure our markets are fair to all investors and bringing charges against those who profit remains a top priority for the FBI.”
According to the Complaint unsealed today in Manhattan federal court:
From 2015 through 2016, EWIESS operated a company (the “Company”) that purported to host an online foreign currency trading platform. Investors could either trade currencies themselves, or have the Company trade on their behalf. EWIESS represented that the Company had expertise in forex trading and could achieve outsized returns, and that investor funds being traded by the Company would be fully guaranteed against losses by a particular United States bank—assuming that the investor provided a sufficiently high amount of money. To substantiate this purported guarantee, moreover, EWIESS distributed forged documents that appeared to have been (but in actuality were not) issued by the relevant bank. EWIESS also employed other individuals in his scheme, promising large commissions, as well as prizes like watches and cellular telephones, to individuals who raised money for the scheme.
EWIESS and others raised more than $5.8 million during the course of the scheme, with much of this money coming from investors in Saudi Arabia and other countries. Instead of using investor proceeds to trade currencies, as the he and the Company had promised, however, EWIESS spent millions of his investors’ money on personal expenses like travel and hotels, on gambling trips, and on transfers to his family members. Other investor money was used to pay returns to investors so that they would invest or refer additional money to EWIESS and the Company, thereby allowing the scheme to continue for a longer period of time.
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EWIESS, 38, of Israel, is charged with one count of conspiring to commit wire fraud and one count of wire fraud. Each count 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.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Robert Allen is in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
 As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.