CFTC Charges Oregon and Illinois Residents and a Florida Company with Misappropriation of $44 Million in Ongoing Digital Asset and Commodity Futures Fraud
washington d.c. – The Commodity Futures Trading Commission today announced that it has filed a civil lawsuit in the U.S. District Court for the Northern District of Illinois, alleging Sam Ikkurty aka Sreenivas I Rao (Ikkurty) from Portland, Oregon, Ravishankar Avadhanam of Aurora, Illinois, and Jafia LLC, a company owned by Ikkurty in Florida, by fraudulently soliciting at least $44 million for stakes in a so-called income fund invested in digital assets and other instruments. The enforcement action also accuses the defendants of operating an illegal commodity pool and failing to register as a commodity pool operator.
In addition, the Complaint involves three funds owned and operated by the Defendants, Ikkurty Capital LLC d/b/a Rose City Income Fund, Rose City Income Fund II LP (Rose City) and Seneca Ventures LLC, as accused depositaries of funds for which they have no legitimate interest.
On May 11, 2022, United States District Court Judge Hon. Mary Rowland signed a ex parte legal restraining order freezing assets controlled by defendants, preserving records and appointing a temporary receiver. The defendants were notified of the proceedings on May 16, 2022 and a status hearing is scheduled for May 25, 2022.
In its ongoing litigation, the CFTC is seeking restitution to defrauded investors, restitution of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchanges (CEA) and CFTC regulations.
Background to the case
The complaint alleges that since at least January 2021, the defendants have used a website, YouTube videos and other means to solicit more than $44 million from at least 170 participants to buy, hold and trade digital assets. , commodities, derivatives, swaps and commodities. forward contracts. The Complaint further alleges that instead of investing the Participants’ Pooled Funds as depicted, the Defendants misappropriated the Participants’ Funds by distributing them to other Participants, in a manner akin to a Ponzi scheme. The Complaint also alleges that the Defendants transferred participant funds to other accounts under their control and for their benefit. The defendants also transferred millions of dollars to an offshore entity which, in turn, may have transferred funds to a foreign cryptocurrency exchange. None of these funds were returned to the pool.
The Division of Enforcement personnel responsible for this case are Candice Haan, Heather J. Dasso, Joseph Patrick, Venice Bickham, Stacie Pan, David Terrell, Scott Williamson, and Robert Howell.
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