Tuesday, April 16

Former NY cop charged with fraud in foreign exchange trading fund

U.S. Attorney for the Eastern District of New York Breon Peace attends a news conference on recent enforcement actions against cryptocurrency at the U.S. Justice Department Building in Washington, D.C., on Jan. 18, 2023.

Anna Moneymaker | Getty Images

A former New York City police officer was indicted for conspiracy to commit wire fraud after he allegedly lied to investors and lost most of the $4.8 million they put into his foreign exchange-focused investment fund, prosecutors said Wednesday.

Ex-cop Jason Rodriguez, 37, is accused of falsely promising investors in his fund, Technical Trading Team, that there would be guardrails to protect the trading risks for their money. That included a vow to never put a maximum of 1% of investors’ funds at risk at any given time, the indictment says.

“In reality, Rodriguez ignored those guardrails and lost millions in investor funds and also misappropriated hundreds of thousands of dollars which he used to pay for luxury car rentals, travel and other personal expenses,” said Brooklyn U.S. Attorney Breon Peace.

Peace’s office said that as Rodriguez, who was arrested Wednesday, lost an increasing amount of money in trading in foreign exchange, he used money from new investors to pay prior investors their promised investment returns.

Read more CNBC politics coverage

Rodriguez, who founded his fund in 2020 and was its chief operating officer, also is accused of lying to investors by telling them that he had quit the New York Police Department after about seven years because he had been so successful at foreign exchange trading.

Also Read  The engineer who builds bridges between Nature and the big city

In fact, Peace’s office said Rodriguez resigned from the NYPD in October 2019 “after pleading guilty to a misdemeanor crime and incurring a number of disciplinary infractions.”

The U.S. Attorney’s Office said that out of the approximately $4.8 million that investors wired to accounts controlled by Rodriguez from April 2020 to September 2022, about $3.5 million has never been repaid to investors.

Rodriguez, who lives in Bellerose, Queens, faces a maximum possible sentence of 20 years in prison if convicted in the criminal case. He was released on $200,000 bail co-signed by his brother and sister after he appeared in U.S. District Court in Brooklyn on Wednesday afternoon.

Rodriguez’s attorney, Benjamin Yaster, declined to comment when asked about the indictment.

The indictment identifies by name, but does not criminally charge, Edwin Carrion, the CEO of Technical Trading Team.

Carrion previously lived in Florida but last May changed his residency to the country of Colombia, court records state. The indictment says Carrion provided back-office functions to TTT, which included handling contracts with investors and managing disbursements to investors, in addition to soliciting investments from friends and family with Rodriguez.

Danielle Hass, a spokeswoman for the U.S. Attorney’s Office, when asked if Carrion would be prosecuted in the case, said, “We can neither confirm nor deny the existence of any ongoing investigation.”

However, the Commodity Futures Trading Commission in September filed a civil lawsuit against TTT, Carrion and Rodriguez in Brooklyn federal court, accusing them of knowingly and recklessly making “fraudulent and material misrepresentations” about their forex trading strategy, experience and risk management.

Also Read  Inflation spiral seen breaking in July, helped by lower energy prices

The lawsuit, which alleges fraud as well as violations of the Commodity Exchange Act and CFTC regulations, says the defendants persuaded nearly 30 people to invest at least $5 million in the TTT investment pool. Neither Carrion nor Rodriguez registered with the CFTC as an associated person of TTT, in violation of federal regulations, according to the suit.

“Investments were made in the form of loans by participants in the TTT Pool to TTT, memorialized in promissory notes, for which TTT promised to make monthly interest payments ranging from 1.5 to 2%, or 18 to 24% annual interest,” the suit alleges.

The suit says the defendants lost more than $3 million in trading forex on a leveraged basis, and “misappropriated participant funds for personal use.”

In August 2021, TTT “wired about $150,000 from the funds bank account to a company that specializes in brokering sales of yachts,” the suit said. The same account “made multiple wire transfers and checks to Rodriguez and Carrion personally over the Relevant Period, totaling approximately $138,694 and $37,551, respectively,” according to the suit.

“Over the Relevant Period, Carrion and Rodriguez regularly flaunted their possession of luxury cars and their international travels both in person and in their social media accounts,” the suit says.

“Because TTT was trading on leverage, the risk that TTT took on by entering that trade far exceeded the amount it paid up front to enter it,” the suit said. “Defendants also regularly held positions for months at a time, contrary to their representations that trades would be closed out within a single day, and not held overnight.”

Also Read  Periodistas mexicanas piden al Gobierno español un acuerdo internacional por la prensa

Carrion last month wrote to the court in response to the lawsuit saying that he would represent himself in the civil case.

Rodriguez two weeks earlier in a letter to the judge handling the suit asked for a 60-day extension of the time to answer the complaint.

“I have been having difficulties obtaining legal counsel due to financial hardship. With an extension I am certain that I can obtain counsel so that I can properly defend myself,” Rodriguez wrote in his request, which was granted.

Don’t miss these stories from CNBC PRO:


Leave a Reply

Your email address will not be published. Required fields are marked *