Federal Court Orders New York Man to Pay Over $3.4 Million in CFTC Forex Fraud Scheme

The Commodity Futures Trading Commission (CFTC) announced that the U.S. District Court for the Eastern District of New York has entered a final judgment against Daniel Winston LaMarco of New York City, ordering him to pay a total of $3,450,400. The ruling mandates $862,600 in restitution to victims alongside a $2,587,800 civil monetary penalty. The final judgment, issued by U.S. District Court Judge Diane Gujarati, permanently enjoins LaMarco from violating the Commodity Exchange Act and imposes a permanent ban on any commodity-related activities. The decision adopts findings and recommendations by Magistrate Judge James M. Wicks concerning summary judgment against LaMarco for forex fraud and commodity pool operator fraud, following an earlier default judgment against his company, GDLogix, Inc., which received identical financial penalties and permanent bans for fraud and operating without registration. According to the CFTC's enforcement action, originally filed in July 2017, LaMarco and GDLogix fraudulently solicited and accepted $1,492,650 from pool participants—predominantly friends and acquaintances—to trade forex contracts in a commodity pool. Rather than trading on behalf of participants, LaMarco misappropriated funds for personal use, lost nearly all client money through unsuccessful trading in his personal account, and operated a Ponzi scheme by distributing $630,050 of principal funds to select participants as purported profits. In addition to the final judgment, the court issued sanctions against LaMarco for bad-faith misconduct. The court struck portions of his filings from the record after determining that he repeatedly submitted false, defamatory allegations against the CFTC and made inexcusable threats toward CFTC counsel. In a parallel criminal proceeding, LaMarco previously pleaded guilty to wire fraud and commodities fraud, resulting in a 42-month prison sentence and an order to pay $872,600 in restitution.