Chilean Police Probe Forex Firm Amid Allegations of Fraud

  • Lawsuit against Santiago-based IM Forex was filed on Monday
  • Lawsuit follows separate probe of AC Inversions last week

Chilean police are probing a second firm that was offering high returns through leveraged bets in the foreign exchange market, one week after prosecutors said they had began an investigation into an alleged Ponzi scheme at another company.

A lawsuit for fraud was filed Monday in Santiago on behalf of clients of IM Forex, according to Rafael Garay, a plaintiff in the lawsuit. IM Forex has capital of about $100 million and around 1,500 clients, Garay said in images transmitted on CNN Chile. IM Forex said in a statement on its website that it’s cooperating with police and that the allegations are unfounded. Phone calls to the company were not immediately answered. An official at the communications department for the prosecutor’s office confirmed the lawsuit had been received.

Prosecutors are already investigating AC Inversions, an asset manager that filed for bankruptcy last week. Officials at the company are currently detained pending trial for allegedly operating a “pyramid” scheme, prosecutors said in a statement on their website. The company left around 500 investors with losses of about $20 million, it said. Some press reports say the losses could rise to 50 billion pesos, or more than $70 million. The company’s website is no longer operating.

AC Inversions was offering returns of up to 7.5 percent a month in an alleged Ponzi scheme, according to a report by El Mercurio Inversiones on March 1. In a Ponzi scheme, past investors are paid through the funds of new investors.

The founder of the company, a former member of the French Foreign Legion, started the company four years ago. Police seized two Ferrari sports cars and a Dodge Ram pickup truck at his house in a gated community outside of the capital Santiago after the bankruptcy.

IM Forex offered customers a return of 6 percent per month if they invested at least 10 million pesos (about $15,000) and didn’t withdraw the funds before a whole year, according to the same report in El Mercurio Inversiones.

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