U.S. Attorney for the Eastern District of New York Breon Peace attends a press conference on recent cryptocurrency enforcement actions at the U.S. Department of Justice building in Washington, DC on January 18, 2023.
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A former New York City police officer has been charged with 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.
On Thursday, recently unsealed federal court records in Brooklyn revealed that the business partner of Jason Rodriguez, the ex-cop charged in the case, pleaded guilty last month to conspiracy to commit wire fraud in connection with their forex investment fund, Technical Trading Team have.
Rodriguez, 37, is accused of falsely promising investors on the technical trading team that there would be guardrails in place to protect trading risks to their money. This also included a promise not to expose a maximum of 1% of investor funds to risk at any time, according to the indictment.
“In reality, Rodriguez ignored these guardrails and lost millions in investor funds, in addition to misusing hundreds of thousands of dollars that he used to pay for luxury car rentals, travel and other personal expenses,” said U.S. Attorney Breon Peace of Brooklyn.
The Peace office said Rodriguez, who was arrested Wednesday, was losing more and more money through foreign exchange trading, using money from new investors to pay previous investors their promised investment returns.
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Rodriguez, who founded his fund in 2020 and was its chief operating officer, is also accused of lying to investors by telling them that he resigned from the New York Police Department after about seven years because of his success in foreign exchange trading has been.
The Peace office said that Rodriguez actually resigned from the NYPD in October 2019 “after pleading guilty to a misdemeanor and committing a series of disciplinary violations.”
The U.S. Attorney’s Office said that of the approximately $4.8 million that investors transferred to accounts controlled by Rodriguez from April 2020 to September 2022, approximately $3.5 million was never returned to investors.
Rodriguez, who lives in Bellerose, Queens, faces a maximum sentence of 20 years in prison if convicted on the felony charges. After appearing in U.S. District Court in Brooklyn on Wednesday afternoon, he was released on a $200,000 bond co-signed by his brother and sister.
Rodriguez’s attorney, Benjamin Yaster, declined to comment on the charges.
Rodriguez’s business partner, Edwin Carrion, the CEO of Technical Trading Team, is named in the indictment.
Court records show Carrion pleaded guilty on Jan. 25 to the same scheme Rodriguez is accused of at TTT. His sentencing is scheduled for October 2nd.
Carrion previously lived in Florida but changed his residence to Colombia last May, court records show.
The indictment against Rodriguez states that Carrion provided back-office functions for TTT, which included executing contracts with investors and managing payouts to investors, as well as soliciting investments from friends and relatives of Rodriguez.
The Commodity Futures Trading Commission filed a civil lawsuit in Brooklyn federal court in September against TTT, Carrion and Rodriguez, accusing them of knowingly and negligently making “fraudulent and material misrepresentations” about their foreign exchange trading strategy, experience and risk management.
The lawsuit, which alleges fraud and 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 affiliate of TTT, a violation of federal regulations, the lawsuit says.
“Investments were made in the form of loans from participants in the TTT pool to TTT, evidenced by promissory notes, for which TTT promised monthly interest payments of 1.5 to 2% or 18 to 24% annual interest,” the lawsuit alleges .
The lawsuit alleges that the defendants lost more than $3 million through leveraged foreign exchange trading and “misappropriated participant funds for personal use.”
In August 2021, TTT transferred “approximately $150,000 from the fund’s bank account to a company that specializes in brokering yacht sales,” the lawsuit says. During the relevant period, the same account made “several transfers and checks to Rodriguez and Carrion personally, totaling approximately $138,694 and $37,551, respectively,” the complaint states.
“During the relevant period, Carrion and Rodriguez regularly flaunted their ownership of luxury automobiles and their international travel both in person and on their social media accounts,” the lawsuit states.
“Because TTT traded with leverage, the risk TTT incurred by entering this trade far exceeded the amount it paid up front to enter,” the lawsuit says. “Furthermore, the defendants routinely held positions for months, contrary to their claims that trades were closed out within a single day rather than held overnight.”
In response to the lawsuit, Carrion wrote to the court last month saying he would represent himself in the civil case.
Rodriguez had asked for a 60-day extension of the deadline to respond to the complaint in a letter to the judge hearing the lawsuit two weeks earlier.
“I had difficulty obtaining legal representation due to financial difficulties. With an extension of time, I am confident that I will be able to obtain legal representation so that I can adequately defend myself,” Rodriguez wrote in his motion, which was granted.
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2024-02-29 19:50:20
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