Judge orders $228 million penalty for NY man who used investor funds for luxury cars in crypto trading fraud

A New York man and his "Ponzi scheme" firm were ordered to pay over $228 million after a federal agency accused him of soliciting millions of people to trade assets, including cryptocurrency and then misappropriating those funds for luxury cars.

New York District Judge Valerie Caproni granted the Commodity Futures Trading Commission's motion for summary judgment on Tuesday. The CFTC had earlier requested that the court allow the case to proceed without a trial based on current statements. 

In 2022, the CFTC charged Eddy Alexandre and his company, EminiFX, Inc., alleging he solicited $59 million from hundreds of people to trade forex and cryptocurrencies, and misappropriated significant amounts of the funds. The CFTC also noted in the complaint that Alexandre and his company had never been registered with the agency. 

"For the foregoing reasons, the CFTC’s Motion for Summary Judgment is GRANTED," Judge Caproni said on Tuesday. "Defendants Alexandre and EminiFX are jointly and severally liable to pay restitution in the total amount of $228,576,962. Defendant Alexandre is liable to pay disgorgement in the amount of $15,049,500. Any amount Alexandre pays toward restitution shall offset his disgorgement obligation."

In the order, Caproni said that thousands of investors pledged at least $262 million in EminiFX, with losses totaling upwards of $49 million.  

The CFTC said Alexandre misappropriated a significant amount of customers' money. 

"For example, Alexandre used participant funds to make payments to BMW, Mercedes-Benz, and Saks Fifth Avenue," the CFTC said in May 2022. "Payments were also made for flights, luxury hotels, clothing, and occupational and physical therapy." 

Alexandre also faced criminal charges, pled guilty and was sentenced to nine years in prison, according to the U.S. Attorney for the Southern District of New York.