Boston traders charged with forex fraud over $30 mln

* Company collapsed in 2008

* Misspent funds on expenses, cars, officials allege

By Ross Kerber

BOSTON, Oct 28 (BestGrowthStock) – Federal officials on Thursday
charged a pair of Boston-area currency traders with bilking
investors out of more than $30 million.

Cases filed by the U.S. Justice Department and the U.S.
Securities and Exchange Commission allege the two founders of
the now-shuttered Boston Trading and Research LLC raised about
$40 million from at least 750 investors, but misspent much of
the money on operating expenses, luxury SUVs and entertainment,
including a Florida home.

By the time the 20-person company collapsed in September
2008 only about 10 percent of the money remained, officials

Charged were Craig Karlis, 50, of Hopkinton, Massachusetts,
and Ahmet Devrim Akyil, 38, a resident of Turkey and previously
of Hingham, Massachusetts. Their attorneys did not respond to

The two formed Boston Trading in 2007 and collected
investments of at least $10,000, officials said. The money was
meant to be invested in the foreign currency (Read more about trading foreign currency. trading venture,
which allegedly promised customers it would cap losses.

Instead, “the defendants diverted investor money for their
own personal purposes,” the SEC’s complaint said. “Akyil and
Karlis knew, or were reckless in not knowing, that investor
funds were being used for BTR’s (the firm’s) and their own
personal benefit, and that investors were not aware of this.”

The company also misled investors about its trades,
authorities said.

The cases were filed in Massachusetts U.S. District Court.
The Justice Department’s case identifies a third co-owner of
the firm, a chief technology officer identified only as a
“G.P.,” who was not charged.

At the start of September 2008 this person tried to
convince Akyil to close various money-losing trades, then began
closing them himself, the Justice Department said. By the end
of business on Sept. 4, 2008, BTR had lost about 90 percent of
customers’ money. The next day G.P. sent an email to customers
with the first word of the troubles.

David Bergers, director of the SEC’s Boston office,
declined to discuss how much money might still be recovered or
how the matter came to the attention of authorities.
(Reporting by Ross Kerber; Editing by Gary Hill)

Boston traders charged with forex fraud over $30 mln