CFTC secures entry of default against Capital Ventures Group
The Commodity Futures Trading Commission (CFTC) has secured an entry of default against Capital Ventures Group, LLC, one of the defendants in a $6 million FX fraud case. This becomes clear from the latest documents filed with the Texas Northern District Court.
The CFTC had requested the Court to enter the default of Capital Ventures Group, LLC, pursuant to Rule 55(a) of the Federal Rules of Civil Procedure, for failure to plead or otherwise defend this action.
In December 2021, the Court granted the CFTC’s request for entries of default as to a number of other defendants in this action – Rudy Avila, CIG Internacional Sociedad Anonima, Capital Ventures Group LLC, The LIFT Group LLC, Trading Technologies Group Sociedad Anonima, Trading Ventures Group LLC, Ventures Group LLC.
Let’s note that the entries of default mark a formality in civil lawsuits. They are typically followed by judgments of default, which specify the penalties to be imposed in a particular lawsuit.
Let’s recall that the CFTC commenced this action in September 2021. The regulator charged defendants Rudy Avila and six U.S. and Costa Rican companies with fraudulent solicitation to trade in commodity futures, options on commodity futures, and retail off-exchange Forex, misappropriation of funds, and issuing false statements.
As alleged in the complaint, since at least 2017 and continuing through at least spring of 2020, Avila, LIFT, CIG and TTG, acting through their officers, employees, or agents, engaged in a scheme and artifice to defraud by fraudulently soliciting and obtaining at least $4.2 million from at least 170 CIG clients for the purported purpose of trading derivatives and forex.
The complaint further alleges that in a second scheme, since at least 2019 and continuing to the present, Avila, TVG, CVG and VGL, acting through their officers, employees or agents, engaged in another scheme and artifice to defraud by fraudulently soliciting and obtaining at least $1.8 million from at least 55 TVG clients also for the purported purpose of trading derivatives and Forex.
According to the complaint, instead of trading client funds as promised, the defendants obtained and misappropriated funds from CIG and TVG clients by making false material representations and promises and by concealing material information from CIG and TVG clients.
As alleged, the defendants never traded derivatives and forex on behalf of their clients and, instead, stole most of their clients’ investments. In total, CIG clients lost a total of $3.58 million and TVG clients lost a total of at least $1.773 million.