August 3, 2015
CFTC Charges Illinois Resident Husam Tayeh, Dinar Corp., Inc., and
My Monex, Inc. with Fraud and Other Violations Involving Foreign
Currency Scheme
Federal Court Issues Emergency Order Freezing Assets and Protecting Books and Records
Washington, DC — The U.S. Commodity Futures Trading Commission
(CFTC) today announced the unsealing of a civil enforcement action
filed in the U.S. District Court for the Middle District of Alabama,
charging
Husam Tayeh of Oak Lawn, Illinois;
Dinar Corp., Inc. (DCI), a Nevada corporation; and
My Monex, Inc. (Monex
NV), a Nevada corporation (collectively, the Defendants), with
operating a fraudulent scheme involving foreign currency (forex), and
failing to register with the CFTC as required by federal law. The CFTC
Complaint further names
Theodore S. Hudson, II and his company
My Monex, Inc., an Alabama corporation (Monex AL), both of Dothan, Alabama, as Relief Defendants.
The CFTC Complaint was filed under seal on July 27, 2015, and that
same date U.S. District Judge Myron H. Thompson issued an emergency
Order freezing and preserving assets under Defendants’ and Relief
Defendants’ control and prohibiting them from destroying documents or
denying CFTC staff access to their books and records. The Court
scheduled a hearing for August 10, 2015, on the CFTC’s separate motion
for a preliminary injunction.
The Complaint alleges that beginning from at least January 2012 and
continuing to the present (the relevant period), Tayeh, DCI, and Monex
NV engaged, and are engaging, in a fraudulent scheme involving the
offering of agreements, contracts or transactions in off-exchange forex
on a leveraged, margined, or financed basis to retail customers who were
not eligible contract participants (ECPs) and that do not result in
actual delivery of forex within two (2) days of the transaction date(s).
Defendants, who have never been registered as required with the CFTC,
have engaged in more than $8 million of these illegal, off-exchange
retail forex transactions.
Tayeh created and operates DCI and Monex NV, business entities that
he uses to facilitate the Defendants’ fraudulent activities and that act
as the counterparty(s) in the subject agreements, contracts or
transactions in forex. Defendants operate their fraudulent scheme via
the Internet through the use of their website, by offering, and entering
into, transactions in forex with non-ECP retail customers that are
leveraged, margined or financed by the Defendants, and that result in
actual delivery of forex – if at all - within periods of not less than
15 days and as much as 120 days following the date of the
transaction(s).
The Complaint further alleges that in furtherance of the fraudulent
scheme, Tayeh, individually and on behalf of DCI and Monex NV, made, and
continues to make, material misrepresentations and omit material facts
in solicitations to actual and prospective customers via the website,
including but not limited to: (1) representing that DCI operates a
“fully licensed and fully compliant licensed money services business”
but failing to disclose that DCI has been served with cease and desist
orders in the states of Texas and Illinois for operating without
required licenses; (2) representing that DCI and Monex NV provide the
“best price guaranteed” and the “best prices up front all the time” but
failing to disclose that the forex transactions they offer to retail
customers include significant finance charges; (3) failing to disclose
that DCI and Monex NV are each operating as a registered foreign
exchange dealer (RFED) without being registered with the Commission as
required; and (4) failing to disclose that Tayeh is acting as an
associated person (AP) of an RFED(s) without being registered with the
CFTC as required. Relief Defendants Hudson and Monex are alleged to
have accepted funds from the Defendants to which they have no legitimate
claim.
In its continuing litigation, the CFTC seeks restitution to defrauded
customers, disgorgement of ill-gotten gains, a civil monetary penalty,
permanent registration and trading bans, and a permanent injunction
against future violations of federal commodities laws, as charged.
The CFTC appreciates the assistance of the Office of the United
States Attorney for the Middle District of Alabama, the Alabama
Securities Commission, the Federal Bureau of Investigation, the Dothan
Alabama Police Department, and the Houston County Alabama Sheriff’s
Office.
CFTC Division of Enforcement staff members responsible for this
action are Timothy J. Mulreany, JonMarc P. Buffa, Kyong J. Koh, Patricia
A. Gomersall, Joanna M. Lara, Tashieka Taylor, and Paul G. Hayeck, as
well as Jeremy Christianson from the Office of Data and Technology.
* * * * * *
CFTC’s Foreign Currency (Forex) Fraud Advisory
The CFTC has issued several customer protection
Fraud Advisories that provide the warning signs of fraud, including the
Foreign Currency Trading (Forex) Fraud Advisory,
which states that the CFTC has witnessed a sharp rise in Forex trading
scams in recent years and helps customers identify this potential fraud.
Customers can report suspicious activities or information, such as
possible violations of commodity trading laws, to the CFTC Division of
Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or
file a tip or complaint online.
Media Contact
Dennis Holden
202-418-5088
Last Updated: August 3, 2015