CFTC Sentences Forex & Crypto Ponzi Scheme Operator to Repay More Than $31 Million!

While already incarcerated, the U.S. Commodity Futures Trading Commission (CFTC) has revealed that the U.S. District Court for the Western District of Texas has mandated [Abner Alejandro Tinoco](https://fintelegram.com/tag/abner-alejandro-tinoco) and his business, [Kikit & Mess Investments, LLC](https://fintelegram.com/tag/kikit-mess-investments), to pay over $31 million in financial restitution.

The court’s order, issued on July 9, requires them to make restitution, disgorge profits, and pay civil penalties due to their participation in a forex and cryptocurrency Ponzi scheme.

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Key Judgments

The court’s ruling obliges Abner Alejandro Tinoco and Kikit & Mess, both previously located in El Paso, Texas, to:

Compensate $6,203,792.18 to 199 victims who were defrauded.
Disgorge $6,257,904.89, granting a dollar-for-dollar credit for any restitution payments received.
Pay a civil monetary penalty of $18,773,714, which is triple the amount of their illegal profits.

Fraudulent Activities

The deceitful actions of Tinoco and Kikit & Mess were first addressed on March 25, 2022, when the court issued a consent order for permanent injunction. This order prohibited them from future infractions of the Commodity Exchange Act (CEA) and CFTC regulations, barred them from trading in CFTC-regulated markets, and disqualified them from CFTC registration.

The CFTC investigation uncovered that beginning in September 2020, Tinoco and his firm ran an illicit scheme that accepted over $7.2 million in investments from clients. Rather than investing these funds as promised, they funneled the money to pay falsified “investment profits” to other clients, similar to a Ponzi scheme. Additionally, the funds were misappropriated to cover Tinoco’s personal expenses, including lavish travel, real estate acquisitions, and luxury automobiles.

Criminal Proceedings

Alongside the CFTC’s actions, the Department of Justice charged Tinoco with five counts of wire fraud on November 29, 2022, based on similar claims. Tinoco pled guilty to these charges on February 29 and was sentenced to 84 months in prison, followed by three years of supervised release. Furthermore, he was ordered to pay $9,023,695.77 in restitution. Tinoco is currently serving his sentence at the Federal Correctional Institution in Safford, Arizona.