Investment Fraud: HAENA PARK Pled Guilty To Commodities Fraud In Connection With Scheme To Defraud Investors

Manhattan Woman Pleads Guilty In Manhattan Federal Court To Commodities Fraud In Connection With Scheme To Defraud Investors Of More Than $23 Million

Preet Bharara, the United States Attorney for the Southern District of New York, announced that HAENA PARK pled guilty in Manhattan federal court today to commodities fraud. The charge relates to PARK’s scheme to defraud more than 40 individual investors out of more than $23 million. PARK solicited investments for the purpose of trading in a variety of securities and commodities, including off-exchange foreign currency contracts, through the use of false and misleading statements about, among other things, her historical trading performance. PARK was arrested on June 2, 2016, in Manhattan, New York, and pled guilty today before United States District Judge Ronnie Abrams.

U.S. Attorney Preet Bharara said: “Through her guilty plea today, Haena Park has admitted to commodities fraud, lying about her rates of return and trading expertise to lure prospective investors to her fund and then losing almost all of the $23 million she raised through her lies. To keep her fraud scheme alive, Park sent fake account statements to her investors and used new investor money to pay back old ones.”

According to the Indictment and statements made at today’s plea hearing:

From September 2009 through June 2016, PARK raised more than $23 million from more than 40 individual investors, purportedly for the purpose of trading in a variety of securities and commodities, including equities, futures, and off-exchange foreign currency (“forex”) transactions, through the use of her firms, Phaetra Capital Management LP and Argenta Group, LLC. In connection with the scheme, PARK made a series of false and misleading representations to investors, including that PARK was an accomplished forex trading adviser earning annualized returns as high as 48.9 percent for her investors. In truth and in fact, PARK was not an accomplished forex trader, her trading was consistently unsuccessful, and the trading results emailed to investors by PARK were false and did not reflect the trading losses actually incurred by PARK. Rather, from September 2009 through June 2016, PARK lost approximately $19.5 million of the $20 million that she traded, including in commissions and fees, principally in highly leveraged futures and forex transactions.

To prevent or forestall redemptions by investors, and to continue to raise money from investors to fund her scheme, PARK generated fictitious account statements, which she sent to investors on a monthly basis. Instead of accurately reporting the trading losses PARK was suffering, the account statements indicated that the investors were making money nearly every month. To hide her trading losses, PARK used new investor funds to pay back other investors in a Ponzi-like fashion. In total, PARK distributed approximately $3 million back to investors from funds deposited by new investors.

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PARK, 41, of Manhattan, New York, faces a maximum sentence of 10 years in prison and a maximum fine of $1 million, or twice the gross gain or loss from the offense. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. PARK is scheduled to be sentenced by Judge Abrams on April 28, 2017, at 2:30 p.m.

Mr. Bharara praised the work of the Department of Homeland Security, Homeland Security Investigations and the El Dorado Task Force. He also thanked the Commodity Futures Trading Commission and the Securities and Exchange Commission for their assistance.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Christine I. Magdo is in charge of the prosecution.

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