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Fake Broker Who Stole $3 Million Sentenced: 5 Tips to Spot Forex Scams

People trust brokers to make money, not take money. However, with forex scams or crypto scams, this is precisely what happens. Some forex scams seem obvious with extravagant claims, aggressive strategies for getting clients, unprofessional website content, and other red flags. However, more clever people behind forex scams play the long game and can create a veneer of professionalism only to betray their clients. 

If you have lost money to a forex scam, you will need a reliable fund recovery service. Professionals at Pengeretur provide information to consumers about credit card chargebacks, cryptocurrency refunds, wire recalls, and other fund recovery strategies. We advise clients on the chargeback process and the best ways to pursue fund recovery whether the issue is merchant or broker dispute or if the charges were unauthorized.

Anatomy of a Forex Scam

There are many forex scams, and regulators around the world have taken actions to prevent these frauds from taking advantage of consumers. The U.S. government takes the threat of forex scams particularly seriously and has shut down many of these frauds following the financial crisis of 2008 and since the passage of the Dodd-Frank Act of 2012. 

However, despite these efforts, many consumers are either not aware of the importance of working only with regulated brokers or feel indifferent in the face of the threat. Often forex scams use enticing language and huge promises as a way to persuade consumers to put aside their skepticism and take a chance to make large amounts of money. 

Kelvin O. Ramirez was one of the most “successful” U.S-based forex scammers and managed to steal $3 million from traders and investors before he was caught.  He operated under several aliases and created names for many fake forex trading opportunities which he advertised on social media platforms, particularly Instagram. 

Ramirez lured consumers in through social media promises outsized gains and “double your money” offers. Some of these forex scams involved trading services, such as actual trading, instruction, tools, and trading signals. 

He organized trading pools that allowed clients to trade forex in groups. Also, he offered software which he promised would provide 100% returns for $250 monthly. Ramirez also gave clients access to trading signals for as much as $25,000. However, the software, signal services, and trading were all fake. All of the money went right into Ramirez’s account and was used for running his forex scams and his personal use. 

Fortunately, the CFTC or the Commodity Futures Trading Commission raised the alarm based on their investigation into the many complaints they received. The CFTC brought a case against Ramirez, who never appeared in court or responded to the charges and the complaint. A Texas federal judge has demanded a $2.2 million penalty and Ramirez could face 20 years in prison for wire fraud as well as a fine of $750,000. 

In addition, the CFTC is actively involved in recovery funds for clients of Ramirez. They thought they were devoting their money to a legitimate forex trading service and instead, this forex scammer used the money for his own purposes. Given the high profile and reliability of the CFTC and the fact this fraudster was caught, there is reason to believe that fund recovery, in this case, will be successful. 

How to Avoid Forex Scams

There are many takeaways from the Kelvin O. Ramirez forex scams. Most importantly, consumers should beware of the following:

  • Unregulated brokers
  • Impossible claims (i.e. “double your money”)
  • Reliance on social media rather than a secure website
  • Lack of transparency and proof of who is behind the service
  • Aggressive marketing tactics, including excessive haste

The forex scams masterminded by Kelvin O. Ramirez carry many hallmarks that can be observed in a variety of frauds. Many of these consumers could have avoided losing money if they had ensured the financial service was licensed. All brokers should have licenses and financial services, such as software should have some proof of legitimacy. Without a license, there is very little oversight.

 In this case, clients were lucky that the CFTC stepped in, but they were only able to do so after many complaints were made. If these services had been regulated, problems and disputes could have been kept to a minimum and dealt with sooner.  

Consumers should stay away from any deal guaranteeing that it will “double your money.” any level of guaranteed returns with an asset as risky as forex is questionable. Providers of financial services can give a general idea of what people can expect to make, but these should not be promised. 

Many forex scams and crypto scams take place on social media. It is much easier for fake brokers to hide on social media, to create personas, and block people they have cheated than on a secured website. Every trading product or broker should have more than a social media page but should have a secure website. 

Consumers should research who is behind the service. They should find the identity of the broker or person and be able to verify all information. Staying safe from the beginning may involve keeping far away from aggressive marketing tactics. Urging extreme haste is one tactic used by forex scams. The idea is that the consumer will be rushed out of doing the research required for making wise decisions. 

Despite taking precautions, some consumers will fall prey to forex scams. If you have lost money to a fraud broker, a fake financial service or have a dispute, discuss your choices with fund recovery companies. 

There is a chance that even if you follow these precautions you still may fall victim to a forex scam. If this happens, report the crime and seek guidance from expert fund recovery services. 

Pengeretur professionals assist clients in fund recovery, particularly with chargebacks. We provide information about the chargeback process and tools that will help you analyze your situation and assess the best strategies for pursuing fund recovery. 

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