CFTC Secures Judgement Against New York Companies to Pay Over $2.4 Million in Restitution, Penalties for Forex Fraud

WASHINGTON - The Commodity Futures Trading Commission today announced the U.S. District Court for the Eastern District of New York entereda default judgment against Safety Capital Management Inc.,and GNS Capital Inc., both doingbusiness as ForexnPower in Queens, New York, for retail forex fraud, fraud as commodity pool operators and commodity trading advisors, and related regulatory violations.

The court adopted a magistrate judge's report and recommendation findingthat the companies "deliberately exploited their access to a vulnerable community - Korean-language speakers in Queens who were totally reliant on [the defaulting] defendants to protect and manage their investments."

The court ordered Safety Capital and GNS to pay $835,058 in restitution, jointly and severally with defendants John H. Won and Tae Hung Kang aka Kevin Kang.

The court also ordered civil monetary penalties of $1,441,143 against Safety Capital and $186,102 against GNS, representing triple the monetary gain from the offenses. The court order permanently enjoins the companies from further violations of the Commodity Exchange Act and Commission regulations, as charged.

The default judgment resolves all remaining claims in the CFTC's Sept. 25, 2015, complaint [See CFTC Press Release No. 7245-15]. A consent order entered Aug. 31, 2022, resolved all claims against Kang [See CFTC Press Release No. 8583-22]. A Sept. 19, 2024, summary judgment order resolved all claims against Won.

In a parallel criminal case, United States v. Kang, et al., No. 18-cr-184 (E.D.N.Y. April 11, 2018), Kang pleaded guilty to securities fraud conspiracy. A jury found Won guilty of securities fraud and conspiracies to commit wire fraud, securities fraud, and money laundering.

The CFTC cautions that restitution orders may not result in victims recovering any money lost because defendants may not have sufficient funds or assets.