CFTC Wins $31 Million Fine In Crypto Fraud Case – Details

The US Commodity Futures Trading Commission (CFTC) has won a massive fine against fraudulent crypto investor Abner Alejandro Tinoco and his company Kikit & Mess Investments, LLC. This development marks the end of a three-year legal suit.

CFTC Vs. Abner Tinoco

In October 2021, the CFTC announced a civil enforcement case against Tinoco and his investment firm accusing both parties of solicitations and misappropriation of over $3.9 million belonging to 61 clients. The Commission explained that starting from at least September 2020, Tinoco presented Kikit as an investment company that helped customers manage their portfolios via trading in the foreign exchange and cryptocurrency markets.

However, reports and investigations soon revealed that the defendants had diverted the funds received from unsuspecting customers into financing Tinoco’s personal life through the acquisition of a private jet, mansion, cars, and some real estate properties, among others.

Furthermore, they also presented some fake “profits” to investors with these funds, applying the mechanism of a typical Ponzi scheme.  Alongside launching a lawsuit, the CFTC convinced US Judge David C. Guaderrama to order the freezing of all assets belonging to Tinoco and Kikit & Mess Investments in order to present transfer records. 

In March 2022, the CFTC was also granted an initial consent order of permanent injunction against defendants banning them from trading in any CFTC-regulated market or possibly breaching any further CFTC regulations and laws in the Commodity Exchange Act (CEA).

Tinoco To Pay $19 Million To CFTC, $12 Million To Fraud Victims

In a press release on July 26, 2024, the CFTC announced that US Judge Guaderrama delivered a final order against Abner Tinoco and his investment company directing both parties to pay multiple fines culminating in over $31 million. 

The defendants are expected to jointly pay $6.20 million as compensation to 199 fraud victims, while also paying another $6.25 million in disgorgement with dollar-to-dollar credit for any settlement payment to victims. Furthermore, Tinoco and Kikit will pay an additional $18.7 civil monetary penalty fine, which represents three 3x the funds stolen via their fraudulent investment scheme. 

Presently, Abner Tinoco remains confined to the Federal Correctional Institution, Salford, Arizona where he is currently serving an 84-month sentence after pleading guilty to five counts of wire fraud following an indictment by the US Department of Justice (DOJ) in November 2022. The defendant from El Paso, Texas was also ordered to pay $9.02 million as compensation to victims.