Criminal and Civil Charges Filed Against Sham Traders for COVID-19 Investment Schemes

Oct 12

On September 25, 2020, Kenzley Ramos, from Lawrenceville, Georgia, was arrested and indicted for an investment scheme tied to COVID-19.

Earlier this year, the Texas Securities Commissioner brought an action against Ramos, entering an Emergency Cease and Desist Order to protect Texans and stop the fraudulent COVID-19 investment scheme.  According to the Texas action, Ramos fraudulently promised individuals they could profit from the COVID-19 pandemic by trading in foreign currency and binary options.  Regardless of changes in the markets, Ramos was also guaranteeing the payment of returns, according to the order, saying there is “[n]o possible way [investors] can lose money.” 

The Texas action exposed his scheme and traced his use of principal.  For example, in December 2019, one investor sent $1,000 to a bank account owned by Ramos, giving it a balance of $1,035.  Two days later, Ramos withdrew $1,020 in cash from the account. According to the order, Ramos stopped communicating with the investor, never paid the promised profits on the account, and never returned the $1,000 principal deposit.

The agency’s Enforcement Division coordinated its continued investigation with the Commodity Futures Trading Commission and the Federal Bureau of Investigation.  On September 28, the CFTC filed a civil action against Ramos in the United States District Court for the Northern District of Dallas.  The civil action is seeking restitution for victims and civil penalties.

In April, the Securities Commissioner entered an Emergency Cease and Desist Order against James F. “Stormy” Walsh,” a Florida scammer scheming to sell fraudulent forex investments to Texas residents.  The order alleged Walsh promised he would leverage volatility in the markets due to COVID-19 and pay staggering returns – as much as 60 percent per month.  In his words, the scheme provided a “safe haven” in the context of “all the turmoil the last few weeks about the virus and its massive effects on the world’s financial markets.”

After stopping the scheme in Texas, the agency continued to work with the CFTC.  Using evidence provided by the Securities Board, the CFTC ultimately filed a civil action against Walsh.  The civil action was the CFTC’s first enforcement action alleging misconduct tied to the pandemic.

The Texas Securities Board acknowledges and thanks the U.S. Attorney’s Office for the Northern District of Texas, the FBI and the CFTC for their work in the matter involving Ramos and the CFTC in the matter involving Walsh.