CFTC secures over $30 million judgment against defendants in Fundsz fraud case

The Commodity Futures Trading Commission secured a win in court after the agency said the two defendants participated in a digital assets and precious metals fraud scheme that they then tried to walk back. The court ordered them to pay over $30 million in fines.

On Wednesday, the U.S. District Court for the Middle District of Florida entered a default judgment against Brian Early and Alisha Ann Kingrey for their alleged scheme, which the CFTC said also involved an "unincorporated Fundsz entity and its website," according to a statement from the agency.

As board members and moderators of the entity's Telegram group, the court found that Early and Kingrey lied materially about Fundsz's expected profits, past trading performance and risks of loss, while also falsely representing that investors' money could be traded in line with a "proprietary algorithm" and that their funds could be later withdrawn with interest.

When Early and Kingrey realized they were being investigated by the CFTC, they tried to walk back claims, the court found.

"The court further found that when Early and Kingrey learned of the CFTC’s investigation, they began walking back their profitability claims and worked to eliminate Fundsz’s social media presence," the agency said.

Also on Wednesday, the court entered consent orders in two other defendants involved in the scheme — Rene Larralde and Juan Pablo Valcarce, the agency said. Larralde died in 2023, and Rachel Larralde was substituted as a defendant and was ordered to "turnover possession and control of the Larralde Residence 'as is'", according to the consent order.

Meanwhile, as part of his consent order, Valcarce was permanently banned from having crypto or precious metals traded on his behalf and from further violations of CFTC rules.