Judge Orders $228M Restitution for 25,000 Victims of AI-Boasted Crypto Scam

U.S. District Judge Valerie Caproni has ruled that Eddy Alexandre and his company EminiFX must pay $228.5 million in restitution to investors defrauded by a crypto Ponzi scheme that affected over 25,000 individuals. The decision, issued on Tuesday, grants summary judgment in favor of the Commodity Futures Trading Commission (CFTC) in its civil enforcement action against Alexandre. This follows Alexandre’s July 2023 criminal conviction and sentencing to nine years in prison for orchestrating the fraudulent EminiFX trading platform.

The scheme, which operated from September 2021 to May 2022, promised investors guaranteed weekly returns of 5% to 9.99% using a purported “AI trading technology” referred to as the “Robo-Advisor Assisted Account (RA3).” According to court documents, Alexandre’s company generated losses in 24 of its 30 operational weeks, and even the highest reported weekly return—9.98%—was actually only 2.28%. Alexandre himself admitted in a criminal sentencing letter that the weekly figures he provided were not based on actual investment returns. The CFTC calculated the restitution amount by subtracting withdrawals from total contributions by investors.

Alexandre exploited his position of trust within Long Island's Haitian community and his own church congregation to recruit investors, leveraging their limited financial literacy to draw in nearly $248 million in total funds. Federal prosecutors had initially charged him in 2022 for commodities and wire fraud after soliciting $59 million from early investors. During the scheme, Alexandre diverted at least $15 million to personal accounts, which were used to purchase luxury assets such as a BMW and a Mercedes-Benz. His guilty plea in the criminal case has now barred him from disputing liability in the civil case, as determined by the court through the doctrine of collateral estoppel.

An equity receiver appointed by the court has been overseeing asset recovery efforts since January 2025, with distributions to defrauded investors already underway. Despite the completion of key legal proceedings, the case remains open as recovery efforts continue. The CFTC’s legal victory underscores the regulatory body’s ongoing efforts to combat fraud in the crypto and forex trading sectors, particularly when schemes are disguised under high-tech jargon or false promises of guaranteed returns.

Experts have emphasized the importance of investor education, particularly in communities with lower financial literacy, to prevent similar scams. The case highlights the need for due diligence and skepticism when evaluating investment opportunities promising unusually high returns. As the CFTC continues to pursue restitution on behalf of victims, the ruling serves as a cautionary example of the legal and financial consequences for those who exploit trust in fraudulent schemes.

Source: [1] CFTC Wins Summary Judgment in $228M Crypto Ponzi Case (https://decrypt.co/335968/cftc-wins-summary-judgment-228m-crypto-ponzi-case) [2] CFTC Wins $228M Restitution Order Against Ponzi Schemer (https://www.law360.com/articles/2378647/cftc-wins-228m-restitution-order-against-ponzi-schemer)